expense on an intangible asset with a finite life is recognized in surplus or deficit
as the expense category that is consistent with the nature of the intangible asset.
Gains or losses arising from the derecognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying amount of
the asset and are recognized in the surplus or deficit when the asset is
derecognized.
3.6 Financial instruments
Financial assets
Initial recognition and measurement
Financial assets are classified as financial assets at fair value through surplus or
deficit, loans and receivables, held-to-maturity investments, or available-for-sale
financial assets, as appropriate. The LGU determines the classification of its
financial assets at initial recognition.
Purchases or sales of financial assets that require delivery of assets within a time
frame established by regulation or convention in the marketplace (regular way
trades) are recognized on the trade date, i.e., the date that the LGU commits to
purchase or sell the asset.
The financial assets of the Province of Negros Oriental include: cash and short-
term deposits; trade and other receivables; loans and other receivables and quoted
and unquoted financial instruments.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification.
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.
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