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had no impairment loss been recognised in prior years. Such reversal of an impairment
loss is recognised as income.
e)
Financial assets
The financial assets held by the Group are classified in the following categories:
a)
Loans and receivables: financial assets arising from the sale of goods or the rendering
of services in the ordinary course of the Company's business, or financial assets
which, not having commercial substance, are not equity instruments or derivatives,
have fixed or determinable payments and are not traded in an active market.
b)
Held-for-trading financial assets: assets acquired with the intention of selling them in
the near term and assets that form part of a portfolio for which there is evidence of a
recent actual pattern of short-term profit-taking. This category also includes financial
derivatives that are not financial guarantees (e.g. suretyships) and that have not
been designated as hedging instruments.
c)
Available-for-sale financial assets: these include debt securities and equity
instruments of other companies that are not classified in any of the aforementioned
categories.
Initial recognition
Financial assets are initially recognised at the fair value of the consideration given, plus
any directly attributable transaction costs.
Subsequent measurement
Loans and receivables and held-to-maturity investments are measured at amortised cost.
Held-for-trading financial assets are measured at fair value, based on the expected
results, the estimated dividend payable, the price per share and the volatility thereof, and
the risk-free rate at year-end. The result of these fair value changes is recognised in profit
or loss.
Lastly, available-for-sale financial assets are measured at fair value and the gains and
losses arising from changes in fair value are recognised in equity until the asset is
disposed of or it is determined that it has become (permanently) impaired, at which time
the cumulative gains or losses previously recognised in equity are recognised in the net
profit or loss for the year. In this regard, (permanent) impairment is presumed to exist if
the market value of the asset has fallen by more than 40% or if there has been a
prolonged fall in market value over a period of 18 months without the value having
recovered.
At least at each reporting date the Group tests financial assets not measured at fair value
through profit or loss (accounts receivable) for impairment. Objective evidence of
impairment is considered to exist when the recoverable amount of the financial asset is
lower than its carrying amount. When this occurs, the impairment loss is recognised in the