Page 48 - Nanyang Technological University

NOTES TO
FINANCIAL STATEMENTS (CONT’D)

31 March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.7 Impairment — non-financial assets (cont’d)

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2.8 Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they originated. All
other financial assets (including assets designated at fair value through profit or loss) are recognised
initially on the trade date, which is the date that 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 assets 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 classifies non-derivative assets into the following categories: financial assets at fair value
through profit or loss and loans and receivables.

Financial assets at fair value through profit or loss

An instrument is classified at fair value through profit or loss if it is acquired principally for the purpose
of selling in the short term or is designated as such upon initial recognition. Financial instruments are
designated at fair value through profit or loss if the Group manages such investments and makes purchase
and sale decisions based on their fair value in accordance with the Group’s documented risk management
and investment strategies. Upon initial recognition, attributable transaction costs are recognised in the
profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair
value, and changes therein are recognised in the profit or loss.

Financial assets designated at fair value through profit or loss comprise fixed income, quoted equity,
unquoted investments and other investments.

46 NTU ANNUAL REPORT 2015