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Diaranson, 30 Juni 2021 AWEMainta 17

Notes to the Abbreviated Financial Statements (continued)

reliably. All other repairs and maintenance are charged to the state- impairment as the difference between the recoverable amount of are measured at fair value through profit or loss.
ment of income during the financial period in which they are incurred. the associates and its carrying value and recognizes the amount in The Company reclassifies debt instruments when and
the statement of income. only when its business model for managing those assets
Depreciation on assets is charged over the estimated useful lives changes. The reclassification takes place from the start of
of the assets using the following rates and methods: The Company discontinues the use of the equity method from the the first reporting period following the change. Such changes
date when the investment ceases to be an associate or when the are expected to be infrequent.
• installations: straight line method, 10% per annum investment is classified as held for sale.
• Office furniture & equipment: Business model assessment
 straight line method, 10 - 25% per annum The Company holds 23.1% interest in Guardian Resorts Inter- The Company’s business units determine their business models
national Inc. at the level that best reflects how it manages groups of financial
An asset’s carrying amount is written down immediately to its assets to achieve its business objective. Factors considered by
recoverable amount if the asset’s carrying amount is greater than Financial instruments the business units in determining the business model for a
its estimated recoverable amount. group of assets include:
(a) Initial recognition and measurement 
Gains and losses on disposals are determined by comparing pro- Financial assets and liabilities are recognised when Company • the stated policies and objectives for the Company of assets
ceeds with carrying amount. These are included in the statement becomes a party to the contractual provisions of the instru- and the operation of those policies in practice. These in-
of income. ment. Regular way purchases and sales of financial assets are clude whether management’s strategy focuses on earning
recognised on settlement date, the date on which the Company contractual interest income, maintaining a particular interest
Investment properties commits to purchase or sell the asset. Regular way purchases rate profile, matching the duration of the financial assets
Freehold or leasehold properties held for long-term rental yields or sales are purchases or sales of financial assets that require with the duration of any related liabilities or expected cash
that are not occupied by the Company are classified as invest- delivery of assets within the time frame established by regula- outflows or realising cash flows through sale of the assets;
ment properties. Investment properties comprise freehold land tion or convention in the marketplace. • how performance of the Company of assets is evaluated
and buildings. They are measured initially at cost, including trans- and reported to management;
action costs. Subsequent to initial recognition, investment properties At initial recognition, the Company measures financial assets at • the risks that affect the performance of the business model
are stated at fair value. Fair value is based on active market prices, its fair value plus, in the case of financial assets not at fair value (and the financial assets held within that business model)
adjusted as necessary, for any difference in the nature, location, or through profit or loss, transaction costs that are directly attrib- and how those risks are managed;
condition of the specified asset. Fair value is determined annually utable to the acquisition of financial assets. Transaction costs of • how managers of the business are compensated (for ex-
by accredited external valuators. Investment properties are not financial assets carried at fair value through profit or loss are ample, whether the compensation is based on the fair value
subject to depreciation. Any appreciation or diminution in value is expensed in the statement of income. of the assets managed or on the contractual cash flows
recognized in the statement of income. collected);
The Company’s financial assets include cash and short-term • the frequency, volume and timing of sales of financial assets
If investment properties become owner-occupied, they are reclas- deposits, investment in debt and equity securities, interest in prior periods, the reasons for such sales and expectations
sified as property, plant and equipment, and their fair value at the receivable, receivables arising from insurance contracts and about future sales activity.
date of reclassification becomes its cost for subsequent accounting reinsurance contracts and other loans and receivables.
periods. Alternatively, where properties classified as held for use The solely payment of principal and interest (SPPI) test
become investment properties because of a change in use, these Financial liabilities are initially measured at fair value, and, ‘Principal’ for the purpose of this test is defined as the fair value
properties are accounted for as investment properties and any where applicable, adjusted for transaction costs. The Company’s of the financial asset at initial recognition and may change over
differences arising between the carrying amount and the fair value financial liabilities include trade, intercompany and other the life of the financial asset (for example, if there are repay-
of these items at the date of transfer are recognized in equity as a payables. ments of principal or amortisation of the premium/discount).
revaluation of property. However, if a fair value gain reverses a ‘Interest’ is defined as consideration for the time value of money
previous impairment loss, the gain is recognized in the statement (b) Classification and subsequent measurement and for the credit risk associated with the principal amount
of income. outstanding during a particular period of time and other basic
Debt instruments lending risks and costs, as well as a profit margin.
Investment properties are derecognized when either they have Subsequent to initial recognition, the Company’s debt instru-
been disposed of or when the investment property is permanently ments are measured in accordance with the business models Where the business model is to hold assets and collect con-
withdrawn from use and no future economic benefits are expected determined by the Company’s respective business units for tractual cash flows or to collect contractual cash flows and sell,
from its disposal. Upon disposal, any surplus previously recorded in managing the asset and the cash flow characteristics of the the Company assesses whether the financial assets’ cash
the property revaluation reserve in equity is transferred to retained asset. There are three measurement categories into which the flows represent solely payments of principal and interest. In
earnings. Company classified its debt instruments: making this assessment, the business units consider whether
the contractual cash flows are consistent with a basis lending
Investment in Associate (i) Amortised cost: Assets that are held for collection of con- arrangement i.e. the definition of interest. Where the contractual
The Company’s investment in associated companies is accounted tractual cash flows where those cash flows represent solely terms introduce exposure to risk or volatility that are inconsis-
for using the equity method of accounting. An associate is an entity payments of principal and interest are measured at amortised tent with a basic lending arrangement, the related financial asset
in which the Company has significant influence and which is neither cost. The carrying amounts of these assets are adjusted by is classified and measured at fair value through profit or loss.
a subsidiary nor a joint venture. Significant influence is the power any expected credit loss allowance recognised. In addition
to participate in the financial and operating policy decisions of the to certain debt securities, the Company’s loans and receiv- Equity instruments
investee, but is not control or joint control over those policies. ables are carried at amortised cost. Subsequent to initial recognition, the Company measures all
(ii) Fair value through other comprehensive income: Assets equity investments at fair value, and changes in the fair value
Under the equity method, the investment in associates is carried that are held for collection of contractual cash flows and for of equity instruments are recognised in the statement of
in the statement of financial position at cost plus post acquisition selling the financial assets, where the assets’ cash flows income.
changes in the Company’s share of net assets of the associates. represent solely payments of principal and interest, are
Goodwill relating to associates is included in the carrying amount measured at fair value through other comprehensive income. (c) Derecognition of financial assets
of the investment and is not amortized. The statement of income Movements in the carrying amount are taken through other A financial asset (or when applicable, a part of a financial asset
reflects the share of the results of operations of the associates. comprehensive income except for the recognition of impair- or part of a group of similar financial assets) is derecognised
When there has been a change recognized directly in the equity ment gains or losses, interest revenue and foreign exchange when:
of the associates, the Company recognizes its share of any changes gains and losses which are recognised in profit or loss. • The rights to receive cash flows from the asset have expired.
and discloses this, when applicable, in the statement of changes (iii) Fair value through profit or loss: Assets that do not meet • The Company retains the right to receive cash flows from the
in equity. the criteria for amortised cost or fair value through other asset, but has assumed an obligation to pay them in full with-
comprehensive income are measured at fair value through out material delay to a third party under a ‘pass-through’ ar-
The financial statements of the associates are prepared for the profit or loss. A gain or loss on a debt investment that is rangement.
same reporting period as the parent company. Where necessary, subsequently measured at fair value through profit or loss • The Company has transferred its rights to receive cash flows
adjustments are made to bring their accounting policies in line is recognised in the statement of income in the period in from the asset and either:
with the Company. which it arises. The Company may, on initial recognition, - has transferred substantially all the risk and rewards of
irrevocably designate a financial asset that otherwise the asset, or
After application of the equity method, the Company determines meets the requirements to be measured at amortised cost - has neither transferred nor retained substantially all
whether it is necessary to recognize an additional impairment loss or fair value through other comprehensive income as fair the risks and rewards of the asset, but has transferred
on the Company’s investment in associates. The Company deter- value through profit or loss, if doing so eliminates or signifi- control of the asset.
mines at each statement of financial position date, whether there cantly reduces an accounting mismatch that would other-
is any objective evidence that the investment in associates is wise arise. Financial assets held for trading, or are managed
impaired. If this is the case, the Company calculates the amount of and whose performance is evaluated on a fair value basis,