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105
Maxis Berhad
Annual Report 2014
Notes to the
Financial Statements
31 December 2014
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Impairment of assets (continued)
(ii) Financial assets (continued)
Financial assets carried at amortised cost (continued)
Financial assets are continuouslymonitored and allowances applied against financial assets consist of both specific impairments
and collective impairments based on the Group’s and the Company’s historical loss experiences for the relevant aged category
and taking into account general economic conditions. Historical loss experience allowances are calculated by line of business
in order to reflect the specific nature of the financial assets relevant to that line of business.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised
in the statement of profit or loss.
Financial assets classified as available-for-sale
Significant or prolonged decline in fair value below cost and significant financial difficulties of the issuer or obligor are
considerations to determine whether there is objective evidence that investment securities classified as available-for-sale
financial assets are impaired. If an available-for-sale financial asset is impaired, an amount comprising the difference between
its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously
recognised in the statement of profit or loss, is reclassified from equity to the statement of profit or loss. Impairment losses in
the statement of profit or loss on available-for-sale equity investments are not reversed through the statement of profit or loss
in the subsequent period. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive
income.
(h) Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured
at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged.
The Group and the Company designate and document at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions.
The Group and the Company assess both at hedge inception and on an ongoing basis, whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items and apply hedge
accounting only where effectiveness tests are met on both a prospective and retrospective basis. The fair value of a hedging
derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months,
and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.
The Group and the Company do not have any fair value hedges and net investment hedges.
