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2.5 Financial assets and liabilities
Financial assets and liabilities are classified on initial recognition into the following categories: at fair value through surplus
or deficit or loans and receivables. Financial liabilities are classified as either fair value through surplus or deficit, or financial
liabilities measured at amortised cost. The classification depends on the purpose for which the financial assets and liabilities
were acquired. Management determines the classification of its financial assets and liabilities at initial recognition.
(a) Financial assets and Liabilities at fair value through surplus and deficit
Financial assets and liabilities are financial assets held for trading or designated at fair value through surplus or deficit. Derivatives
are also classified as held for trading unless designated as hedges.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market other than those classified as held at fair value through surplus or deficit, or designated as available for sale. Trade and
other receivables are classified as loans and receivables.
(c) Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost are non-derivative financial liabilities with fixed or determinable payments that
are not quoted in an active market. Trade and other payables, and debt instruments are classified as financial liabilities measured
at amortised cost.
Recognition and measurement
A financial asset or liability is recognised if the Trust becomes party to the contractual provisions of the asset or liability.
Regular way purchases and sales of financial asset and liabilities are recognised on the trade date, the date on which the Trust
commits to purchase or sell the asset or liability. A financial asset or liability is recognised initially at its fair value plus, in the
case of a financial asset or liability not at fair value through surplus or deficit, transaction costs that are directly attributable to
the acquisition or issue of the instrument. Financial assets and liabilities carried at fair value through surplus or deficit initially
recognised at fair value and transaction costs are expensed in surplus or deficit.
After the initial recognition, financial assets are measured at their fair values except for loans and receivables, which are
measured at amortised cost using the effective interest method.
After initial recognition, financial liabilities are measured at amortised cost using the effective interest method except for the
financial liabilities at fair value through surplus of deficit.
Realised and unrealised gains and losses arising from the changes in the fair value of financial assets and liabilities held at fair
value through surplus or deficit are included in surplus or deficit in the period in which they arise.
The fair value of financial assets held that are quoted in an active market are based on current bid prices and the fair value of
financial liabilities held that are quoted in an active market are based on current ask prices. If the market for a financial asset is
not active (and for unlisted securities), the Trust establishes fair value by using valuation techniques. These include the use of
recent arm’s length transaction pricing models refined to reflect the Trust’s specific circumstances.
Financial assets are de-recognised when the rights to receive cash flow from the financial assets have expired or have been
transferred and the Trust has transferred substantially all risk and reward of ownership. Financial liabilities are de-recognised if
the Trust’s obligations specified in the contract expire or are discharged or cancelled.
Impairment of financial assets carried at amortised cost
The Trust assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if
there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset
(a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of
financials assets that can be reliably measured.