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2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Summary of significant accounting policies (cont’d)
(g) Impairment of financial assets (cont’d)
(iii) Available-for-sale investments
The Group and the Bank assess at each reporting date whether objective evidence that a financial asset classified
as available-for-sale has impaired.
In the case of equity investments classified as available-for-sale, an objective evidence would include a
significant or prolonged decline in the fair value of the investment below its cost. Where such evidence exists,
the cumulative loss is measured as the difference between the acquisition cost and the current fair value, less
any impairment loss previously recognised in the statements of income, is removed from equity and recognised
in the statements of income. Impairment losses on equity investments are not reverse through statements of
income; increase in their fair value after impairment are recognised directly in equity.
Certain unquoted equity instruments are stated at cost less impairment as the fair value cannot be
reliably measured.
In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same
criteria as other available-for-sale investments. Where impairment losses have been previously recognised in
the statements of income, if there is a subsequent increase in the fair value of the debt instruments that can be
objectively related to a credit event occurring after the impairment losses was recognised in the statements of
income, the impairment loss is reversed through statements of income.
(h) 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 MFRS 139, are recognised in the statement of financial position when, and
only when, the Group and the Bank become a party to the contractual provisions of the financial instrument.
The Group’s and the Bank’s financial liabilities include borrowings, derivative liabilities as well as other payables.
Financial liabilities except derivatives and those liabilities under hedge accounting are recognised at amortised cost.
Derivative and hedge accounting are explained as per note 2.4(f).
A financial liability is derecognised when they are redeemed or 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 statements
of income.
(i) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and on hand, deposits with banks/financial institutions and short-
term, highly liquid investments which are subject to an insignificant risk of changes in value.
For the purpose of the cash flow statements, cash and cash equivalents are presented net of bank overdrafts and
pledged deposits, if any.
NOTESTOTHEFINANCIALSTATEMENTS
31 DECEMBER 2013
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EXIM Bank Annual Report 2013