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CapitaMall Trust Annual Report 2013 168 Clarity
Notes to the
Financial Statements
3 SIGNIFICANT ACCOUNTING POLICIES (continued)
3.7 Financial instruments (continued)
Non-derivative financial assets (continued)
Financial assets and liabilities are offset and the net amount presented in the balance sheet 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 has the following non-derivative financial assets: 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, loans to joint ventures and cash and
cash equivalents.
Cash and cash equivalents comprise cash balances and bank deposits.
Non-derivative financial liabilities
The Group initially recognises all other financial liabilities (including liabilities designated at fair value through
profit or loss) on the trade date at which the Group becomes a party to the contractual provisions of
the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled
or expired.
The Group has the following non-derivative financial liabilities: loans and borrowings, amounts owing to joint
venture partners, trade and other payables and security deposits.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities aremeasured at amortised cost using the effective
interest method.
Derivative financial instruments and hedging activities
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk
exposures. Embedded derivatives are separated from the host contract and accounted for separately
if the economic characteristics and risks of the host contract and the embedded derivative are not
closely related, a separate instrument with the same terms as the embedded derivative would meet
the definition of a derivative, and the combined instrument is not measured at fair value through
profit or loss. Multiple embedded derivatives in a single instrument are treated as a single compound
embedded derivative if they share the same underlying risk exposures, are interdependent of each other
and are not readily separable.