ACCOUNTABILITY | NOTES TO THE FINANCIAL STATEMENTS 181 INTEGRATED ANNUAL REPORT 2026 2. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 2.16 Financial instruments (continued) (i) Financial assets (continued) b. Subsequent measurement (continued) Debt instruments (continued) (ii) Financial assets at fair value through profit or loss (“FVTPL”) Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at FVTPL. The Group may also irrevocably designate financial assets at FVTPL if doing so significantly reduces or eliminates a mismatch created by assets and liabilities being measured on different bases. Financial assets at FVTPL are carried in the statements of financial position at fair value with net changes in fair value presented as administrative expenses (negative net changes in fair value) or other income (positive net changes in fair value) in profit or loss. Equity instruments The Group subsequently measures all equity investments at fair value. Changes in the fair value of financial assets at FVTPL are recognised in other income or administrative expenses in profit or loss as applicable. (ii) Impairment of financial assets The Group and the Company assess on a forward-looking basis the expected credit loss (“ECL”) associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The Group and the Company have five types of assets that are subject to the ECL model: (i) Trade and other receivables (ii) Contract assets (iii) Finance lease receivables (iv) Cash and bank balances (v) Derivative assets (vi) Other investments (loans to joint ventures and associates) ECL represents a probability-weighted estimate of the difference between the present value of cash flows according to contracts and the present value of cash flows the Group and the Company expect to receive, over the remaining life of the financial instrument. For financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Group and the Company expect to receive from the holder, the debtor or any other party.
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