NOTES TO THE FINANCIAL STATEMENTS
FOR THE FInAncIAL yEAR EnDED 30 JunE 2016
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
h)
Financial assets
Classification
The Group classifies its financial assets according to the nature of the assets and purpose for which the
assets were acquired. Management determines the classification of its financial assets at initial recognition.
The Group’s only financial assets are loans and receivables and held-to-maturity investments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except those maturing later than 12 months
after the reporting date which are classified as non-current assets. Loans and receivables are classified
within “trade and other receivables” and “cash and bank balances” on the statement of financial position.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturities that the Group’s management has the positive intention and ability to hold tomaturity.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date - the date on which the
Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been transferred and the Group has transferred
substantially all risks and rewards of ownership.
On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount is
taken to profit or loss.
Trade receivables that are factored out to banks and other financial institutions with recourse to the Group
are not derecognised until the recourse period has expired and the risks and rewards of the receivables
have been fully transferred. The corresponding cash received from the financial institutions is recorded
as borrowings.
Initial measurement
Loans and receivables and held-to-maturity financial assets are initially recognised at fair value plus
transaction costs.
Subsequent measurement
Loans and receivables and held-to-maturity financial assets are carried at amortised cost using the
effective interest method, less impairment.
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ISOTEAM LTD.
ANNUAL REPORT 2016
