FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 152 FGV HOLDINGS BERHAD EXAMINED OUR NUMBERS 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The principal accounting policies applied in the preparation of financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (continued) (h) Financial assets (continued) Impairment (continued) (v) Write-off (continued) (b) Other debt instruments The Group writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Group may write-off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in impairment gains. (vi) Subsidiaries, joint ventures and associates An impairment loss is recognised for the amount by which the carrying amount of the subsidiary, joint venture or associate exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less costs of disposal and value-in-use. Any subsequent increase in recoverable amount is recognised in profit or loss. Accounting policies applied until 31 December 2017 (i) Classification Until 31 December 2017, the Group and the Company classified its financial assets in the following categories: • financial assets at fair value through profit or loss ( “ FVPL ” ), • loans and receivables, • held-to-maturity investments, and • available-for-sale financial assets ( “ AFS ” ) The classification depended on the purpose for which the investments were acquired. Management determined the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluated this designation at the end of each reporting period. Financial assets at FVPL The Group and the Company classify financial assets at fair value through profit or loss if they are acquired principally for the purpose of selling in the short term, i.e. are held for trading. They are presented as current assets if they are expected to be sold within 12 months after the end of the reporting period; otherwise they are presented as non-current assets. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets.