NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1
SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f)
Other investments in debt and equity securities
76
(g)
The Group's and the Company's policies for investments in debt and equity securities, other than investments in subsidiaries, associates and joint ventures, are as follows:
Investments in debt and equity securities, being those held for non-trading purpose, are classified as available-for- sale securities. Available-for-sale securities are initially stated at fair value, which is their transaction price unless it is determined that the fair value at initial recognition differs from the transaction price and that fair value is evidenced by a quoted price in an active market for an identical asset or liability or based on a valuation technique that uses only
data from observable markets. Cost includes attributable transaction costs.
At the end of each reporting period the fair value is remeasured, with any resultant gain or loss being recognised in other comprehensive income and accumulated separately in equity in the securities revaluation reserve. As an exception to this, investments in equity securities that do not have a quoted price in an active market for an identical instrument and whose fair value cannot otherwise be reliably measured are recognised in the statement of financial position at cost less impairment losses (see note 1(k)). Dividend income from equity securities and interest income from debt securities calculated using the effective interest method are recognised in profit or loss in accordance with the policies set out in notes 1(s)(vii) and 1(s)(vi), respectively. Foreign exchange gains and losses resulting from changes in the amortised cost of debt securities are also recognised in profit or loss.
When the investments are derecognised or impaired (see note 1(k)), the cumulative gain or loss recognised in equity is reclassified to profit or loss. Investments are recognised/derecognised on the date the Group commits to purchase/ sell the investments or they expire.
Financial assets designated at fair value through profit or loss
Financial assets may be designated at fair value through profit or loss when:
the designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets on a different basis;
a group of financial assets is managed and its performance evaluated on a fair value basis; or
the assets include embedded derivatives and such derivatives are required to be recognised separately.
Financial assets designated at fair value through profit or loss are recognised initially at fair value. At the end of each reporting period the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss.
Hong Kong Ferry (Holdings) Company Limited Annual Report 2016