NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2023 3 MATERIAL ACCOUNTING POLICIES (continued) 3.5 Financial instruments (i) Recognition and initial measurement Non-derivative financial assets and financial liabilities Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument. (ii) Classification and subsequent measurement Non-derivative financial assets On initial recognition, a financial asset is classified as measured at: • amortised cost; or • fair value through Unitholders’ fund (“FVOCI”). The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. Financial assets at amortised cost A financial asset is measured at amortised cost if it meets both the following conditions and is not designated as at fair value through profit or loss (“FVTPL”): • it is held within a business model whose objective is to hold assets to collect contractual cash flows; and • its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Equity investments at FVOCI On initial recognition of an equity investment that is not held-for-trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in the Statement of Movement in Unitholders’ Funds. This election is made on investment-by-investment basis. Non-derivative financial assets: Subsequent measurement and gains and losses Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in Statement of Total Return. Any gain or loss on derecognition is recognised in Statement of Total Return. ANNUAL REPORT 2023 195 Other Information Overview Leadership Performance Framework
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