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Ascott Residence Trust
Annual Report 2015
3 Significant accounting policies
(continued)
3.5 Financial instruments
Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are originated.
All other financial assets (including assets designated at fair value through total return) are recognised initially
on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in
transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net
basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets: loans and receivables, and cash and cash
equivalents.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents and
trade and other receivables (excluding prepayments).
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable
on demand and form an integral part of the Group’s cash management are included as a component of cash
and cash equivalents for the purpose of the cash flow statement.
Non-derivative financial liabilities
The Group initially recognises all financial liabilities (including liabilities designated at fair value through the
statement of total return) on the trade date at which the Group becomes a party to the contractual provisions
of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
The Group has the following non-derivative financial liabilities: loans and borrowings and trade and other
payables.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective
interest method.
Notes to the Financial Statements
Year ended 31 December 2015
