KUMPULAN FIMA BERHAD
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Summary of Significant Accounting Policies (Cont’d)
(t) Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability.
Financial liabilities within the scope of FRS 139 Financial Instruments: Recognition and
Measurement, are recognised in the statement of financial position when, and only when, the
Group and the Company become a party to the contractual provisions of the financial instrument.
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or
other financial liabilities.
(i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
or financial liabilities designated upon initial recognition as at fair value through profit or
Financial liabilities held for trading includes derivatives entered into by the Group that do not
meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value
and subsequently stated at fair value, with any resultant gains or losses recognised in profit
or loss. Net gains or losses on derivatives include exchange differences.
(ii) Other Financial Liabilities
The Group’s and the Company’s other financial liabilities include trade payables, other
payables, due to subsidiaries and loans and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable
transaction costs and subsequently measured at amortised cost using the effective interest
Loans and borrowings are recognised initially at fair value, net of transaction costs
incurred, and subsequently measured at amortised cost using the effective interest method.
Borrowings are classified as current liabilities, unless the group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting date.
A financial liability is derecognised when the obligation under the liability is extinguished. When
an existing financial 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 the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in profit or loss.