2. MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D.) 2.6 Financial instruments - initial recognition and subsequent measurement (cont’d.) (a) Financial assets (cont’d.) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss includes investments which the Group had not irrevocably elected to classify at fair value through OCI. Impairment of financial assets The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate (“EIR”). The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has performed its assessment based on its historical credit loss experience, adjusted for forwardlooking factors specific to the debtors and the economic environment. In making this assessment, the Group also takes into consideration that it would maintain its name as the registered owner of the properties until full settlement is made by the purchasers or the purchasers’ end-financiers. (b) Financial liabilities Financial liabilities of the Group and of the Company are classified, at initial recognition, as financial liabilities at amortised cost. The Group’s and the Company’s financial liabilities at amortised cost are disclosed in Note 36. 2.7 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits associated with the asset will flow to the Group and to the Company and the cost of the asset can be measured reliably. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group and the Company recognise such parts as individual assets with specific useful lives and depreciates them accordingly. The carrying amount of parts that are replaced is derecognised. 263
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