Page 87 - Neal and Massy Holdings Annual Report 2012

85 forward focused
2 Summary Of Significant Accounting Policies (continued)
2.10 Financial assets (continued)
a) Classification (continued)
i) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit
or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in
the short term or if so designated by management. Derivatives are also categorised as held for trading unless they are
designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are
expected to be realised within 12 months of the statement of financial position date.
ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than 12 months after the statement
of financial position date. These are classified as non-current assets. Loans and receivables are classified as ‘trade and
other receivables’ and ‘instalment credit and other loans’ in the consolidated statement of financial position.
Instalment credit and other loans are stated at principal outstanding net of unearned finance charges and specific
allowance for loan losses.
Interest from instalment credit is recognised as it accrues on the amortised rate of the reducing balance amount at
the annual percentage rate. Interest earned on other forms of financing is calculated as is appropriate to individual
transactions.
iii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in
any of the other categories. They are included in non-current assets unless management intends to dispose of the
investment within 12 months of the statement of financial position date.
iv) Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed
maturities that the Group’s management has the positive intention and ability to hold to maturity. Held-to-maturity
financial assets are included in non-current assets.
b) Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised
at fair value and transaction costs are expensed in the consolidated income statement.