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Financial instruments classified as available-for-sale financial assets are carried at fair value with any resultant gain or loss, other than
impairment losses and foreign exchange gains and losses on monetary items, being recognised directly in equity. When these investments are
derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where these investments are
interest bearing, interest calculated using the effective interest rate method is recognised in profit or loss.
Listed and unlisted investments are classified as investments at fair value through profit or loss or available-for-sale financial assets. Fair value
of listed investments is calculated by reference to stock exchange quoted selling prices at the close of business on the reporting date. Fair
value of unlisted investments is determined by using appropriate valuation models.
Trade and other receivables originated by the group or company are stated at amortised cost less an allowance for impairment losses.
Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at reporting date.
Financial liabilities other than derivatives are recognised at amortised cost using the effective interest rate method.
Derivative instruments are measured at fair value through profit or loss.
Where a derivative financial instrument is used to economically hedge the foreign exchange exposure of a recognised financial asset or liability,
no hedge accounting is applied and any gain or loss on the hedging instrument is recognised in profit or loss. It is the policy of the group not to
trade in derivative financial instruments for speculative purposes.
Gains and losses arising from measuring the hedging instruments relating to a fair value hedge at fair value are recognised in the statement of
profit or loss. The hedged item is also stated at fair value in respect of the risk being hedged, with any gains or losses recognised in profit or
loss.
Where a derivative is designated as a cash flow hedge, the effective part of the gains or losses from remeasuring the hedging instruments to
fair value are initially recognised directly in other comprehensive income. If the hedged firm commitment or forecast transaction results in the
recognition of a non-financial asset or liability, the cumulative amount recognised in equity up to the transaction date is adjusted against the
initial measurement of the non-financial asset or liability. The ineffective part of any gain or loss is recognised in the statement of profit or loss
immediately. For other cash flow hedges, the cumulative amount recognised in equity is included in net profit or loss in the period when the
commitment or forecast transaction affects profit or loss.
Where the hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to occur, the cumulative
unrealised gain or loss at that point remains in equity and is recognised in accordance with the aforementioned policy when the transaction
occurs. If the hedged transaction is no longer expected to occur, the cumulative unrealised gain or loss is recognised in the statement of profit
or loss immediately.
A financial asset is derecognised (or, where applicable, a part of a financial asset or a part of a group of similar financial assets is derecognised)
if the group’s contractual rights to the cash flows from the financial asset expire or if the group transfers the financial assets to another party
without retaining control or substantially all risks and rewards of the asset.
Where the group has transferred its right to receive cash flows from an asset and has neither transferred nor retained substantially all the risks
and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the group’s continuing involvement in the
asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that the group could be required to repay.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. Where an existing liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference in the
respective carrying amounts is recognised in profit and loss.
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when the company has
a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Financial instruments have been grouped into classes for the purpose of financial instrument risk disclosure. The classes are the segments as
disclosed in the segmental report as the operations within each segment have similar types of risks.
Notes to the consolidated financial statements
for the year ended June 30
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| Bidcorp Limited Annual integrated report 2016