Page 88 - Neal and Massy Holdings Annual Report 2012

86 2012
NOTES TO THE Consolidated FINANCIAL STATEMENTS
September 30, 2012
Expressed in Thousands of Trinidad and Tobago dollars
2 Summary Of Significant Accounting Policies (continued)
2.10 Financial assets (continued)
b) Recognition and measurement (continued)
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair
value. Unlisted equity securities for which fair values cannot be reliably measured have been recognised at cost less
impairment. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective
interest method.
Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or have
been transferred and the Group has transferred substantially all risks and rewards of ownership.
Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category
are presented in the income statement within ‘other (losses)/gains – net’ in the period in which they arise. Dividend
income from financial assets at fair value through profit or loss is recognised in the income statement as part of other
income when the Group’s right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in
other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised
in equity are included in the consolidated income statement as ‘gains and losses from investment securities’. Interest
on available-for-sale securities calculated using the effective interest method is recognised in the consolidated income
statement. Dividends on available-for-sale equity instruments are recognised in the consolidated income statement when
the Group’s right to receive payments is established.
c) Impairment of financial assets
i) Assets carried at amortised cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses
are incurred only if there is objective evidence of impairment, as a result of one or more events that occurred after the
initial recognition of the asset (a ‘loss event’), and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset or group of financial assets that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:
• significant financial difficulty of the issuer or obligor;
• a breach of contract, such as a default or delinquency in interest or principal payments;
• the Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a
concession that the lender would not otherwise consider;
• it becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
• the disappearance of an active market for that financial asset because of financial difficulties; or