58
GDS Global Limited Annual Report 2015
NOTES TO
FINANCIAL STATEMENTS
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon
initial recognition if:
Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
The financial asset forms part of a group of financial assets or financial liabilities or both,
which is managed and its performance is evaluated on a fair value basis, in accordance with
the Group’s documented risk management or investment strategy, and information about the
grouping is provided internally on that basis; or
It forms part of a contract containing one or more embedded derivatives, and FRS 39
Financial Instruments: Recognition and Measurement permits the entire combined contract
(asset or liability) to be designated as at FVTPL.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or
loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any
dividend or interest earned on the financial asset and is included in ‘other gains and losses’ line in
the statement of profit or loss and other comprehensive income.
Held-to-maturity financial assets
Bonds with fixed or determinable payments and fixed maturity dates where the Group has a
positive intent and ability to hold to maturity are classified as held-to-maturity financial assets.
Subsequent to initial measurement, held-to-maturity investments are measured at amortised cost
using the effective interest method less impairment, with revenue recognised on an effective yield
basis.
Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are
not quoted in an active market are classified as “loans and receivables”. Loans and receivables
(including trade and other receivables, bank balances and cash) are measured at amortised cost
using the effective interest method less impairment. Interest is recognised by applying the
effective interest method, except for short-term receivables when the effect of discounting is
immaterial.
Available-for-sale investments
Available-for-sale financial assets are financial assets that are designated as available for sale or are
not classified in any of the above categories of financial assets. Available-for-sale financial assets
are recognised initially at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, they are measured at fair value. Gains and losses arising from changes in
fair value are recognised in other comprehensive income with the exception of impairment
losses, interest calculated using the effective interest method and foreign exchange gains and
losses on monetary assets which are recognised directly in profit or loss. Where the investment
is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised
in other comprehensive income and accumulated in revaluation reserve is reclassified to profit or
loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the
Group’s right to receive payments is established. The fair value of available-for-sale monetary assets
denominated in a foreign currency is determined in that foreign currency and translated at the spot
rate at end of the reporting period. The change in fair value attributable to translation differences
that result from a change in amortised cost of the available-for-sale monetary asset is recognised in
profit or loss, and other changes are recognised in other comprehensive income.
