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Diaranson, 30 Juni 2021 AWEMainta 11

Notes to the Abbreviated Financial Statements (continued)

• Motor vehicles straight-line method, 25% per annum exchange gains and losses which are recognised in profit • The rights to receive cash flows from the asset have expired.
• Office furniture & equipment or loss. • The Company retains the right to receive cash flows from the
straight line method, 10 - 25% per annum (iii) Fair value through profit or loss: Assets that do not meet asset, but has assumed an obligation to pay them in full with-
the criteria for amortised cost or fair value through other out material delay to a third party under a ‘pass-through’ ar-
An asset’s carrying amount is written down immediately to its comprehensive income are measured at fair value through rangement.
recoverable amount if the asset’s carrying amount is greater than profit or loss. A gain or loss on a debt investment that is • The Company has transferred its rights to receive cash flows
its estimated recoverable amount. subsequently measured at fair value through profit or loss from the asset and either:
is recognised in the statement of income in the period in - has transferred substantially all the risk and rewards of
Gains and losses on disposals are determined by comparing pro- which it arises. The Company may, on initial recognition, the asset, or
ceeds with carrying amount. These are included in the statement irrevocably designate a financial asset that otherwise - has neither transferred nor retained substantially all the
of income. meets the requirements to be measured at amortised cost risks and rewards of the asset, but has transferred control
or fair value through other comprehensive income as fair of the asset.
Intangible assets - Computer software value through profit or loss, if doing so eliminates or signifi-
Acquired computer software licenses are capitalized on the basis cantly reduces an accounting mismatch that would other- When the Company has transferred its right to receive cash
of the costs incurred to acquire and bring to use the specific soft- wise arise. Financial assets held for trading, or are managed flows from an asset and has neither transferred nor retained
ware. Costs that are directly associated with the development of and whose performance is evaluated on a fair value basis, substantially all the risks and rewards of the asset nor trans-
identifiable and unique software products controlled by the Com- are measured at fair value through profit or loss. ferred control of the asset, the asset is recognised to the extent
pany, and which will probably generate economic benefits ex- of the Company’s continuing involvement in the asset. Con-
ceeding costs beyond one year, are also recognized as intangible Business model assessment tinuing involvement that takes the form of a guarantee over
assets. These costs are amortized over their estimated useful lives. The Company’s business units determine their business models the transferred asset is measured at the lower of the original
The remaining useful lives of computer software and website de- at the level that best reflects how it manages groups of financial carrying amount of the asset and the maximum amount of
velopment costs range from 1 to 6 years. Costs associated with assets to achieve its business objective. Factors considered by consideration that the Company could be required to repay.
developing or maintaining computer software programmes are the business units in determining the business model for a
recognized as an expense as incurred. group of assets include: On derecognition of a financial asset measured at amortised
 cost, the difference between the asset’s carrying amount and
Financial instruments • the stated policies and objectives for the Company of assets the sum of the consideration received is recognised in the
and the operation of those policies in practice. These include statement of income. In addition, on derecognition of an in-
(a) Initial recognition and measurement whether management’s strategy focuses on earning con- vestment in a debt instrument classified as at fair value through
Financial assets and liabilities are recognised when Company tractual interest income, maintaining a particular interest other comprehensive income, the cumulative gain or loss pre-
becomes a party to the contractual provisions of the instru- rate profile, matching the duration of the financial assets viously accumulated in the fair value reserve is reclassified to
ment. Regular way purchases and sales of financial assets are with the duration of any related liabilities or expected cash the statement of income.
recognised on settlement date, the date on which the Company outflows or realising cash flows through sale of the assets;
commits to purchase or sell the asset. Regular way purchases • how performance of the Company of assets is evaluated A financial liability is derecognised when it is extinguished, dis-
or sales are purchases or sales of financial assets that require and reported to management; charged, cancelled or expires.
delivery of assets within the time frame established by regula- • the risks that affect the performance of the business model
tion or convention in the marketplace. (and the financial assets held within that business model) (d) Modifications of financial assets
and how those risks are managed; If the terms of a financial asset are modified, the Company
At initial recognition, the Company measures financial assets at • how managers of the business are compensated (for evaluates whether the cash flows of the modified asset are
its fair value plus, in the case of financial assets not at fair value example, whether the compensation is based on the fair substantially different from that of the original asset. If the
through profit or loss, transaction costs that are directly attrib- value of the assets managed or on the contractual cash terms are substantially different, the Company derecognises
utable to the acquisition of financial assets. Transaction costs of flows collected); the original financial asset and recognises a new financial asset
financial assets carried at fair value through profit or loss are • the frequency, volume and timing of sales of financial assets at fair value. The date of modification is consequently considered
expensed in the statement of income. in prior periods, the reasons for such sales and expectations to be the date of initial recognition for impairment calculation
about future sales activity. purposes, including for the purpose of determining whether a
The Company’s financial assets include cash and short-term significant increase in credit risk has occurred. The Company
deposits, investment in debt and equity securities, interest The solely payment of principal and interest (SPPI) test also assesses whether the new financial asset recognised is
receivable, receivables arising from insurance contracts and ‘Principal’ for the purpose of this test is defined as the fair value deemed to be credit-impaired at initial recognition, especially
reinsurance contracts and other loans and receivables. of the financial asset at initial recognition and may change over in circumstances where the modification was driven by the
the life of the financial asset (for example, if there are repay- debtor being unable to make the originally agreed payments.
Financial liabilities are initially measured at fair value, and, ments of principal or amortisation of the premium/discount).
where applicable, adjusted for transaction costs. The Company’s ‘Interest’ is defined as consideration for the time value of money If the cash flows of the modified asset are not substantially
financial liabilities include trade, intercompany and other and for the credit risk associated with the principal amount different, the modification does not result in derecognition of
payables. outstanding during a particular period of time and other basic the financial asset. The Company recalculates the gross carrying
lending risks and costs, as well as a profit margin. amount of the financial asset based on revised cash flows,
(b) Classification and subsequent measurement discounted at the original effective interest rate (or credit-
Where the business model is to hold assets and collect con- adjusted effective interest rate for purchased or originated
Debt instruments tractual cash flows or to collect contractual cash flows and sell, credit-impaired financial assets), and recognises the amount
Subsequent to initial recognition, the Company’s debt instru- the Company assesses whether the financial assets’ cash arising from adjusting the gross carrying amount as a modification
ments are measured in accordance with the business models flows represent solely payments of principal and interest. In gain or loss in the statement of income.
determined by the Company’s respective business units for making this assessment, the business units consider whether
managing the asset and the cash flow characteristics of the the contractual cash flows are consistent with a basis lending Impairment of assets
asset. There are three measurement categories into which the arrangement i.e. the definition of interest. Where the contractual
Company classified its debt instruments: terms introduce exposure to risk or volatility that are inconsistent Impairment of financial assets
with a basic lending arrangement, the related financial asset is At each reporting date, the Company assesses, on a forward-looking
(i) Amortised cost: Assets that are held for collection of classified and measured at fair value through profit or loss. basis, the expected credit losses (ECL) associated with its financial
contractual cash flows where those cash flows represent assets measured at amortised cost and fair value through other
solely payments of principal and interest are measured at Equity instruments comprehensive income (excluding equity instruments).
amortised cost. The carrying amounts of these assets are Subsequent to initial recognition, the Company measures all
adjusted by any expected credit loss allowance recognised. equity investments at fair value, and changes in the fair value of The Company measures loss allowances on its debt instruments at
In addition to certain debt securities, the Company’s loans equity instruments are recognised in the statement of income. an amount equal to lifetime ECL, except in the following cases, for
and receivables are carried at amortised cost. which the amount recognised is 12-month ECL:
(ii) Fair value through other comprehensive income: Assets Financial liabilities
that are held for collection of contractual cash flows and for Subsequent to initial recognition, the Company measures all • Debt securities that are determined to have low credit risk at
selling the financial assets, where the assets’ cash flows financial liabilities at amortised cost. the reporting date; and
represent solely payments of principal and interest, are • Other financial instruments for which credit risk has not
measured at fair value through other comprehensive income. (c) Derecognition of financial assets increased significantly since initial recognition.
Movements in the carrying amount are taken through A financial asset (or when applicable, a part of a financial asset
other comprehensive income except for the recognition of or part of a group of similar financial assets) is derecognised Lifetime ECL are the ECL that result from all possible default events
impairment gains or losses, interest revenue and foreign when: over the expected life of a financial asset, whereas 12-month ECL