Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
51
STAMFORD TYRES CORPORATION LIMITED
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.11
Financial instruments (cont’d)
(b)
Financial liabilities
Initial recognition and measurement
Financial liabilities 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 liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at
fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
(i)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading.
Financial liabilities are classified as held for trading if they are acquired for the purpose of
selling in the near term. This category includes derivative financial instruments entered into by
the Group that are not designated as hedging instruments in hedge relationships. Separated
embedded derivatives are also classified as held for trading unless they are designated as
effective hedging instruments.
Subsequent to initial recognition, financial liabilities 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
liabilities 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.
The Group has not designated any financial liabilities upon initial recognition at fair value
through profit or loss.
(ii)
Other financial liabilities
After initial recognition, other financial liabilities are subsequently measured at amortised cost
using the effective interest rate method. Gains and losses are recognised in profit or loss when
the liabilities are derecognised, and through the amortisation process.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same lender
on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a de-recognition of the original liability and the recognition
of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
