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2. Significant accounting policies (continued)
2.7 Financial assets (continued)
(e) Impairment (continued)
(ii) Available-for-sale fnancial assets
In addition to the objective evidence of impairment described in Note 2.7(e)(i), a signifcant or prolonged
decline in the fair value of an equity security below its cost is considered as an indicator that the available-
for-sale fnancial asset is impaired.
If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve is
reclassifed to proft or loss. The cumulative loss is measured as the difference between the acquisition
cost (net of any principal repayments and amortisation) and the current fair value, less any impairment
loss previously recognised as an expense. The impairment losses recognised as an expense on equity
instruments are not reversed through proft or loss but recognised directly in other comprehensive income.
2.8 Financial liabilities
(a) Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Company becomes a party to the contractual
provisions of the fnancial instrument. The Company determines the classifcation of its fnancial liabilities at
initial recognition.
All fnancial liabilities are recognised initially at fair value, and plus in the case of fnancial liabilities, not at fair value
through proft or loss, directly attributable transaction costs.
(b) Subsequent measurement
After initial recognition, other fnancial liabilities are subsequently measured at amortised cost, using the effective
interest rate method. Gains and losses are recognised in proft or loss when the liabilities are derecognised, and
through the amortisation process.
Notes to the fnancial statements
For the fnancial year ended 31 March 2012
160 POSITIONED FOR GROWTH