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ON A RAPID RISE

NOTES TO
FINANCIAL STATEMENTS (CONT’D)

31 March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.8 Financial instruments (cont’d)

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 trade and other receivables, student loans, grant receivables and cash
and cash equivalents.

Cash and cash equivalents comprise cash balances and bank deposits.

Impairment of financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence
that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one
or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the
original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining
financial assets are assessed collectively in groups that share similar credit risk characteristics. All
impairment losses are recognised in the profit or loss.

Non-derivative financial liabilities

The Group recognises financial liabilities when the Group becomes a party to the contractual provisions
of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled
or expired.

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