Page 176 - Thailand Post Annual Report 2024

Part 1
Overview of the Organization
Part 2
Business Trends
Part 3
Business Model
Part 4
Strategies and Resource Allocation
Part 5
Risk
Part 6
Corporate Governance
Part 7
Operating Results
Part 8
Other Information
Financial liabilities are expressed at fair value through profit or loss assessed at fair value with any profit or loss incurred as a result of changes in fair value recognized in profit or loss, as long as the financial liabilities are not part of the hedging relationship selected. Net profit or loss recognized in profit or loss is due to the combination of any interest payment on financial liabilities and included in the “other profit and loss” entry in profit or loss.
Nevertheless, as for selected financial liabilities to be expressed at fair value through profit or loss, the amount of the change in the fair value of the financial liabilities associated with the change in the credit risk of the liabilities is recognized in other comprehensive income, unless the recognition of the impact of the change in the credit risk of the liabilities in the other comprehensive income would caused or extended an improper accounting match in the profit or loss. The amount remaining from the change in the fair value of the liability is recognized in profit or loss. Changes in fair value related to the credit risk of financial liabilities recognized in other comprehensive income are not subsequently reclassified as profit or loss, but are instead transferred to accumulated earnings when the financial liabilities are written off.
Financial Liabilities Subsequently Valued at Amortized Cost
Financial liabilities that are not (1) consideration anticipated to pay recognized by the buyer in the business merger, (2) held for trading, or (3) selectively required to be expressed at fair value through profit or loss with subsequent assessment with the amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of financial liabilities and allocating interest payments over the relevant period. The effective interest rate is the rate used to dwindle the estimate of future cash payments (including all fees and costs of receipt and payment as part of the effective interest rate, transaction costs, and any other premiums or discounts) over the expected life of the financial liability or (as appropriate) a shorter period to obtain the amortized cost of the financial liability.
Write-off of Financial Liabilities
The Group writes off financial liabilities only when the Group's obligations have been fulfilled, cancelled or terminated. The difference between the book value of written-off financial liabilities and the paid and accrued returns is recognized in profit or loss.
When the Group exchanges debt securities with a significant difference in terms with the lender, it must be considered the end of the original financial liabilities and the similar recognition of the new financial liabilities. The Group records significant changes in the terms of existing financial liabilities or part of the termination of the original financial liabilities and constitutes recognition of a new financial liability, assuming that the terms would differ materially if the depreciation of the present value of cash flows under the new terms includes any fees paid in full with any fees received and discounted using the original effective interest rate, which is a difference of at least 10% from the current value of the outstanding cash flows of the original financial liabilities. If the change is insignificant, the difference between (1) the carrying value of the liabilities before the change and (2) the current value of the cash flow after the change should be recognized in profit or loss as profit or loss from changes in other profits and losses.
3.6 Fair Value Measurement
Fair value means the price expected to receive from the sale of assets or the price payable for transfer of liabilities to other persons. The said transaction shall occur in the normal course of business between the buyer and the seller (market participants) on the date of measurement. The Group uses the price offer in the market having liquidity in measurement of fair value of assets and liabilities which are required by the financial reporting standards to be measured with the fair value, except the case that the market lacks liquidity for the assets or liabilities having the same nature or in the case that the price offer cannot be found in the market with liquidity, the Group will conduct the fair value measurement by implementing the situation-based measurement technique and tries to use the visible information about the assets or liabilities to measure fair value as much as possible.
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Thailand Post Company Limited