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1. Accounting policies and presentation of annual financial statements
continued
1.12 Financial instruments
continued
1.12.6 Other financial liabilities
continued
Derivative instruments
The entity uses derivative financial instruments to hedge its exposure to interest rate risk arising from its financing
activities. Derivative instruments have been designated by the group as instruments held for trading and are accounted
for at fair value through profit and loss. Gains or losses are transferred to non-distributable reserves in the statement of
changes in equity.
The group holds interest rate swap instruments. The fair value of interest rate swaps is the estimated amount that the
entity would receive or pay to terminate the swap at the reporting date, taking into account current interest rates and
the current creditworthiness of the swap counterparties.
1.13 Impairment
Financial assets
Financial assets other than those at fair value through profit or loss are assessed at each reporting date to determine whether
there is any evidence of impairment. A financial asset is considered to be impaired if objective evidence indicates that one or
more events have had a negative effect on the estimated future cash flow of that asset. An impairment loss is recognised
immediately in profit or loss.
Non-financial assets
The carrying amounts of the group’s non-financial assets, are reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment
loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount, and
is recognised in profit or loss.
Goodwill is tested for impairment annually.
An impairment loss is reversed, with the exception of goodwill, if there has been a change in the estimates used to determine
the recoverable amount and there is an indication that the impairment loss no longer exists.
An impairment loss is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount
that would have been determined, net of depreciation, if no impairment loss had been recognised.
1.14 Stated capital
Ordinary shares are classified as equity.
External costs directly attributable to the issue of new shares are shown as a deduction from equity.
1.15 Treasury shares
Company shares held by Hyprop Investments Employee Incentive Scheme Proprietary Limited (incorporated for the benefit of
employees) that have not yet vested are classified as treasury shares on consolidation and presented as a deduction from
equity. These shares are held at cost.
Statement of financial position presentation
On purchase, the cost of the shares acquired is deducted from equity. Subsequently, any gain or loss on the sale or cancellation
of the company’s own equity instruments is recognised directly in equity.
Statement of comprehensive income presentation
Both distributions and unrealised losses on own shares are eliminated from group profit for the year.
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Hyprop Investments Limited
Integrated Report 2015