Financial assets at fair value through surplus or deficit
Financial assets at fair value through surplus or deficit include financial assets
held for trading and financial assets designated upon initial recognition at fair
value through surplus and deficit. Financial assets are classified as held for
trading if they are acquired for the purpose of selling or repurchasing in the near
term. Financial assets at fair value through surplus or deficit are carried in the
statement of financial position at fair value with changes in fair value recognized
in surplus or deficit.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortized cost
using the effective interest method, less impairment. Amortized cost is calculated
by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. Losses arising from
impairment are recognized in the surplus or deficit.
Held-to-maturity
Non-derivative financial assets with fixed or determinable payments and fixed
maturities are classified as held to maturity when the LGUs have the positive
intention and ability to hold it to maturity. After initial measurement, held-to-
maturity investments are measured at amortized cost using the effective interest
method, less impairment. Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of
the effective interest rate. The losses arising from impairment are recognized in
surplus or deficit.
Derecognition
The LGUs derecognize a financial asset or, where applicable, a part of a financial
asset or part of a group of similar financial assets when:
(a) The rights to receive cash flows from the asset have expired or is waived;
(b) The LGU has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material
delay to a third party; and either: (a) the LGUs have transferred substantially all
the risks and rewards of the asset; or (b) the LGUs have neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
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