Page 87 - Restamax Plc Annual Report 2017

Financial assets and liabilities amortised acquisition cost; they consist of loans from
financial institutions, trade payables and other financial
Financial assets liabilities. Financial liabilities are originally recorded
in bookkeeping at fair value. Transaction expenses
According to the IAS 39 standard, the Group’s financial are included in the original book value of the financial
assets are classified into the following groups: financial liabilities. Later, all financial liabilities are measured at
assets recorded at fair value through profit or loss, loans amortised acquisition cost using the effective interest
and receivables and available-for-sale financial assets. method. Financial liabilities are included in both the
The classification is performed on the basis of the purpose non-current and current liabilities.
of the acquisition of the financial assets, and they are
classified during their original acquisition. Impairment of financial assets

Transaction expenses are included in the original book On each closing date, the Group estimates whether
value of the financial assets mentioned above whenever objective evidence exists of the impairment of an indi-
the item is not measured at fair value through profit vidual financial asset or a group thereof. If the fair value
or loss. All purchases and sales of financial assets are of share investments has fallen substantially below their
entered on their trade date, which is the date when the acquisition cost for a period defined by the Group, this
Group commits to purchasing or selling the asset item. is considered evidence of impairment of an available-
for-sale share. If evidence of impairment exists, the loss
An item belonging to financial assets is removed from the accumulated in the fair value fund is moved to the income
balance sheet whenever the Group waives its contractual statement. The impairment loss of equity convertible
rights to the item, the rights are dissolved or the Group investments classified as available-for-sale financial
loses control of the item. assets is not reversed by means of the income statement,
whereas a later reversal of an impairment loss that involves
The group of financial assets recorded at fair value interest instruments is recoded through profit or loss.
through profit or loss includes financial assets that have
been acquired to be held for trading, such as derivatives The Group will record an impairment loss for trade receiv-
and interest funds, or that are classified to be recorded ables or other receivables when objective evidence exists
at fair value through profit or loss during their original that the counterparty will be unable to fulfil its obligation.
recording. Unrealised and realised gains and losses are Substantial financial difficulties on part of the debtor,
recorded into the income statement for the financial probability of bankruptcy or default of payment constitute
period during which they are generated. evidence of impairment. The size of the impairment loss
recorded in the income statement is defined as the differ-
Loans and other receivables are non-derivative financial ence between the book value of the receivable and the
assets that are generated by handing over goods, services current value of the deferred cash flows discounted by the
or money to the debtor. Loans and receivables are not effective rate. If the amount of impairment loss is reduced
quoted on the marketplace, and the payments related during a later financial period, and the reduction can be
to them are either fixed or they can be determined. objectively considered to be related to an event that took
Their measurement basis is the amortised acquisition place after recording the impairment, the loss recorded is
cost using the effective interest method. On the balance reversed and the reversal is recorded through profit or loss.
sheet, they are included in the trade and other receivables
group as current or non-current assets according to their Cash and cash equivalents
nature; they are non-current, if they fall due no sooner
than in 12 months’ time. Cash and cash equivalents consist of cash money, money
on bank accounts, bank deposits that may be withdrawn
Available-for-sale financial assets are non-derivative upon request, as well as other current and highly liquid
assets that have been expressly classified into this group investments that can be easily converted into a prede-
or that have not been classified into any others. They are termined cash amount and that carry a low risk of value
non-current assets, unless the intention is to retain them changes. Items classified as cash and cash equivalent
for less than 12 months after the closing date; in this case, have at most three months’ maturity from the date of
they are included in current assets. Available-for-sale acquisition. Cash and cash equivalents are recorded at fair
financial assets may consist of shares and holdings. They value on the balance sheet.
are measured at fair value, or, whenever fair value cannot
be reliably defined, at their acquisition cost. Changes in
the fair value of available-for-sale financial assets are Borrowing costs
recorded as equity in the fair value fund in the other items
of the comprehensive income statement, taking the tax Borrowing costs are recorded as an expense for the period
effects into account. Accumulated changes in fair value during which they were generated. Transaction costs
are moved from equity into the income statement when accrued from the acquisition of loans are recognised as
the investment is sold or whenever its value has degraded interest expenses using the effective interest method.
to the point where an impairment loss must be entered
for the investment. Share capital

Financial liabilities Share capital consists solely of ordinary shares. The
immediate expenditure from the issue or acquisition of
According to IAS 39 standard, the Group’s financial liabil- new shares or other equity instruments, exclusive of tax, is
ities are included in the financial liabilities measured at recorded as equity, wherein it reduces the purchase consid-

CONSOLIDATED FINANCIAL STATEMENTS 87