Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
49
STAMFORD TYRES CORPORATION LIMITED
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.11
Financial instruments
(a)
Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument. The Group determines the classification of its
financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of
financial assets not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading
and financial assets designated upon initial recognition at fair value through profit or loss.
Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. This category includes derivative financial instruments
entered into by the Group. Derivatives, including separated embedded derivatives are also
classified as held for trading.
The Group has not designated any financial assets upon initial recognition at fair value
through profit or loss.
Subsequent to initial recognition, financial assets at fair value through profit or loss are
measured at fair value. Any gains or losses arising from changes in fair value of the financial
assets are recognised in profit or loss. Net gains or net losses on financial assets at fair value
through profit or loss include exchange differences, interest and dividend income.
Derivatives embedded in host contracts are accounted for as separate derivatives and
recorded at fair value if their economic characteristics and risks are not closely related
to those of the host contracts and the host contracts are not measured at fair value with
changes in fair value recognised in profit or loss. These embedded derivatives are measured
at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs
if there is a change in the terms of the contract that significantly modifies the cash flows that
would otherwise be required.
