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NOTES TO THE FINANCIAL STATEMENTS
continued
for the year ended 30 June 2015
1. Accounting policies and presentation of annual financial statements
continued
1.12 Financial instruments
continued
Derecognition of financial instruments
The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the
entity is recognised as a separate asset or liability.
The group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Offset
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position, when the
group has an enforceable right to set off the recognised amounts, and intends to settle on a net basis or to realise the asset and
settle the liability simultaneously.
Subsequent measurement
Subsequent to initial recognition, these instruments are measured as follows:
Financial assets
1.12.1 Cash and cash equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and
are subject to an insignificant risk of changes in value. Cash and cash equivalents are measured at amortised cost. Interest
earned on cash invested with financial institutions is recognised on an accrual basis using the effective interest method.
1.12.2 Trade and other receivables
Trade and other receivables are carried at amortised cost less any accumulated impairments. An estimate is made of
credit losses based on a review of all outstanding amounts at year-end. Doubtful debts are provided for in the year in
which they are identified, with such movement taken to profit or loss for the period. Short-term receivables are
measured at original invoice amount when the effect of discounting is immaterial.
1.12.3 Loans receivable
Loans receivable are carried at amortised cost using the effective interest method, less any impairment. Interest earned
is recognised on an accrual basis using the effective interest method.
1.12.4 Other investments
An investment is an entity over which the company has no significant influence, through participation in the financial
and operating policy decisions of the investee.
Investments are measured at cost less any impairment where the fair value cannot be measured reliably. Impairment
charges are recognised in profit or loss. Any impairment losses are transferred to the non-distributable reserves in the
statement of changes in equity.
Financial liabilities
1.12.5 Trade payables
Trade and other payables are measured at amortised cost. Short-term payables are measured at the original invoice
amount when the effect of discounting is immaterial.
1.12.6 Other financial liabilities
Non-derivative financial liabilities, comprising long-term interest-bearing loans, are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost using the effective interest method. Any difference
between the proceeds (net of transaction costs) and the settlement or redemption of borrowings, is recognised over
the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.
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Hyprop Investments Limited
Integrated Report 2015
FINANCIAL STATEMENTS