KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
ANNUAL REPORT 2014
66
NOTES
TO THE FINANCIAL STATEMENTS
3
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
3.7 Financial instruments (Cont’d)
(i)
Non-derivative financial assets (Cont’d)
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the assets and settle the liability
simultaneously.
The Group classifies its non-derivative financial assets as loans and receivables.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, loans and receivables are
measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise trade and other receivables, and cash and cash equivalents.
Cash and cash equivalents comprise cash balances and short-term deposits with maturities
of three months or less from the acquisition date that are subject to an insignificant risk of
changes in their fair value, and are used by the Group in the management of its short-term
commitments. For the purpose of the statement of cash flows, pledged deposits are excluded
whilst bank overdrafts that are repayable on demand and that form an integral part of the
Group’s cash management are included in cash and cash equivalents.
(ii) Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the Group
becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or
cancelled or expired.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative liabilities into the other financial liabilities category. Such
financial liabilities are recognised initially at fair value plus any directly attributable transaction
costs. Subsequent to initial recognition, these financial liabilities are measured at amortised
cost using the effective interest method.
The Group’s non-derivative financial liabilities comprise loans and borrowings, and trade and
other payables.
(iii) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from equity, net of any tax effects.
Dividends on ordinary shares are recognised as a liability in the period in which they are
declared.
