Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortized cost using the effective interest method. Gains and losses are
recognized in surplus or deficit when the liabilities are derecognized, as well as through
the effective interest method amortization process.
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.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged
or cancelled, or expires.
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.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the
consolidated statement of financial position if, there is a currently enforceable legal right
to offset the recognized amounts and there is an intention to settle on a net basis, or to
realize the assets and settle the liabilities simultaneously.
Fair value of financial instruments
The fair value of financial instruments that are traded in active markets at each reporting
date is determined by reference to quoted market prices or dealer price quotations (bid
price for long positions and ask price for short positions), without any deduction for
transaction costs.
3.7 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash at bank, deposits on call and
highly liquid investments with an original maturity of three months or less, which are
readily convertible to known amounts of cash and are subject to insignificant risk of
changes in value. For the purpose of the consolidated statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits as defined above, net of
outstanding bank overdrafts.
3.8 Inventories
Inventory is measured at cost upon initial recognition. To the extent that inventory was
received through non-exchange transactions (for no cost or for a nominal cost), the cost
of the inventory is its fair value at the date of acquisition.
After initial recognition, inventory is measured at the lower of cost and net realizable
value. However, to the extent that a class of inventory is distributed or deployed at no
charge or for a nominal charge, that class of inventory is measured at the lower of cost
and current replacement cost.
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