Page 66 - Annual Report 2013
P. 66
Financial Statements
asset is reduced by the same amount. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial
assets other than goodwill that suered impairment are reviewed for possible reversal of the impairment at
each reporting date.
2.6 Financial assets
2.6.1 Classification
The Company classifies its financial assets depending on the purpose for which the financial assets
were acquired. Management determines the classification of its financial assets at initial recognition.
The Company has two classes of financial assets comprising held-to-maturity investments and loans
and receivables. It does not hold any financial assets at fair value through profit and loss nor any avail-
able for sale financial assets.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for maturities greater than
12 months after the end of the reporting date, which are classified as non-current assets. The Compa-
ny’s loans and receivables recognised in the statement of financial position comprise “Trade and other
receivables” and “Cash and cash equivalents”. Refer to notes 2.8 and 2.9 respectively.
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable pay-
ments and fixed maturities that company’s management has the positive intention and ability to hold to
maturity, other than:
• those that the Company upon initial recognition designates at fair value through profit or loss
• those that the Company designates as available for sale
• those that meet the definition of loans and receivables
2.6.2 Recognition and measurement
Regular-way purchases and sales of financial assets are recognised on trade date – the date on which
the Company commits to purchase or sell the asset.
Loans and receivables are initially recognised at fair value and are subsequently measured at amor-
tised cost using the effective interest rate method.
Held-to-maturity financial assets are initially recognised at amortised cost and are subsequently mea-
sured at amortised cost using the effective interest rate method.
Financial assets are derecognised only when the contractual rights to the cash flows from the financial
asset expire or the Company transfers substantially all risks and rewards of ownership.
2.6.3 Impairment
The Company assesses at each end of the reporting period whether there is objective evidence that
a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is
impaired and impairment losses are incurred only if there is objective evidence of impairment as a result
of one or more events that have occurred after the initial recognition of the asset (a probable ‘loss event’)
and that probable loss event (or events) has an impact on the estimated future cash flows of the financial
asset or group of financial assets that can be reliably estimated. Objective evidence that a financial asset
or group of assets is impaired includes observable data that comes to the attention of the Company about
the following events:
• Significant financial difficulty of the issuer or debtor;
• A breach of contract, such as a default or delinquency in payments;
• It is becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation;
• The disappearance of an active market for that financial asset because of financial difficulties; or
• Observable data indicating that there is a measurable decrease in the estimated future cash flow from
a group of financial assets since the initial recognition of those assets, including:
• adverse changes in the payment status of issuers or debtors; or
• national or local economic conditions that correlate with defaults on the assets.
25 of 58 Financial Statements as at 31 December 2013 (Amounts in Euros unless otherwise stated).
asset is reduced by the same amount. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial
assets other than goodwill that suered impairment are reviewed for possible reversal of the impairment at
each reporting date.
2.6 Financial assets
2.6.1 Classification
The Company classifies its financial assets depending on the purpose for which the financial assets
were acquired. Management determines the classification of its financial assets at initial recognition.
The Company has two classes of financial assets comprising held-to-maturity investments and loans
and receivables. It does not hold any financial assets at fair value through profit and loss nor any avail-
able for sale financial assets.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for maturities greater than
12 months after the end of the reporting date, which are classified as non-current assets. The Compa-
ny’s loans and receivables recognised in the statement of financial position comprise “Trade and other
receivables” and “Cash and cash equivalents”. Refer to notes 2.8 and 2.9 respectively.
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable pay-
ments and fixed maturities that company’s management has the positive intention and ability to hold to
maturity, other than:
• those that the Company upon initial recognition designates at fair value through profit or loss
• those that the Company designates as available for sale
• those that meet the definition of loans and receivables
2.6.2 Recognition and measurement
Regular-way purchases and sales of financial assets are recognised on trade date – the date on which
the Company commits to purchase or sell the asset.
Loans and receivables are initially recognised at fair value and are subsequently measured at amor-
tised cost using the effective interest rate method.
Held-to-maturity financial assets are initially recognised at amortised cost and are subsequently mea-
sured at amortised cost using the effective interest rate method.
Financial assets are derecognised only when the contractual rights to the cash flows from the financial
asset expire or the Company transfers substantially all risks and rewards of ownership.
2.6.3 Impairment
The Company assesses at each end of the reporting period whether there is objective evidence that
a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is
impaired and impairment losses are incurred only if there is objective evidence of impairment as a result
of one or more events that have occurred after the initial recognition of the asset (a probable ‘loss event’)
and that probable loss event (or events) has an impact on the estimated future cash flows of the financial
asset or group of financial assets that can be reliably estimated. Objective evidence that a financial asset
or group of assets is impaired includes observable data that comes to the attention of the Company about
the following events:
• Significant financial difficulty of the issuer or debtor;
• A breach of contract, such as a default or delinquency in payments;
• It is becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation;
• The disappearance of an active market for that financial asset because of financial difficulties; or
• Observable data indicating that there is a measurable decrease in the estimated future cash flow from
a group of financial assets since the initial recognition of those assets, including:
• adverse changes in the payment status of issuers or debtors; or
• national or local economic conditions that correlate with defaults on the assets.
25 of 58 Financial Statements as at 31 December 2013 (Amounts in Euros unless otherwise stated).
