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BLUE LABEL INTEGRATED ANNUAL REPORT 2014
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2014
1.
SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial instruments (continued)
Financial liabilities (continued)
The particular recognition methods adopted are disclosed in the individual accounting policy statements
associated with each item.
Regular way purchases and sales of financial assets that require delivery are recognised on trade date, being
the date on which the Group commits to purchase or sell the asset.
The Group recognises a financial asset or a financial liability on its statement of financial position when, and
only when, the Group becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial asset have expired
or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Financial liabilities (or a part of a financial liability) are removed from its statement of financial position when,
and only when, they are extinguished, i.e. when the obligation specified in the contract is discharged,
cancelled or expires.
Financial assets
The Group classifies its financial assets in the following categories: financial assets at fair value through
profit or loss; loans and receivables; and available-for-sale financial assets. The classification depends on the
purpose for which the financial assets were acquired. Management determines the classification of its
investments at initial recognition.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. This category does not include those loans and receivables that the Group
intends to sell in the short term or that it has designated as at fair value through profit or loss or available-
for-sale. These assets are included in current assets, except for maturities greater than 12 months after the
statement of financial position date, which are classified as non-current assets.
Financial assets classified as loans and receivables are initially recognised at fair value plus transaction costs.
Subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective
interest rate method, less any provision for impairment.
Loans and receivables comprise loans receivable and trade and other receivables (excluding prepayments
and VAT).
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.
Impairment of financial assets
A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount.