2 MATERIAL ACCOUNTING POLICIES (continued) 2.6 Financial instruments (continued) (b) Cash and cash equivalents Cash and cash equivalents comprise cash balances and bank deposits. (c) Non-derivative financial liabilities The Company classifies non-derivative financial liabilities under the other financial liabilities category. 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 rate method. Other financial liabilities comprise trade and other payables. (d) Derecognition Financial assets Financial assets are derecognised if the Company’s contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial assets to another party without retaining control or transfers substantially all the risks and rewards of the assets. The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired. (e) Offsetting Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company 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. (f) Impairment of financial assets The Company assesses on a forward looking basis the expected credit losses (“ECL”) associated with its financial assets carried at amortised cost. For trade receivables, the Company applies the simplified approach permitted by the SFRS(I) 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company applies the general approach of 12-month ECL at initial recognition for all other financial assets. At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: • significant financial difficulty of the borrower or issuer; • a breach of contract such as a default; • the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise; • it is probable that the borrower will enter bankruptcy or other financial reorganisation; or • the disappearance of an active market for a security because of financial difficulties. Presentation of allowance for ECLs in the statement of financial position Loss allowance for financial assets measured at amortised cost are deducted from the gross carrying amount of these assets. NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2023 332 CAPITALAND ASCOTT TRUST
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