Page 244 - E-BOOK

Financial reporting standards related to financial instruments

A set of TFRSs related to financial instruments consists of five accounting standards and
interpretations, as follows:

Financial Reporting Standards :

TFRS 7 Financial Instruments: Disclosures

TFRS 9 Financial Instruments

Accounting Standard :

TAS 32 Financial Instruments: Presentation

Financial Reporting Standard Interpretations:

TFRIC 16 Hedges of a Net Investment in a Foreign Operation

TFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

These TFRSs related to financial instruments make stipulations relating to the classification
of financial instruments and their measurement at fair value or amortised cost (taking into
account the type of instrument, the characteristics of the contractual cash flows and the
Annual Report 2020 Company’s business model), calculation of impairment using the expected credit loss method,

and hedge accounting. These include stipulations regarding the presentation and disclosure
of financial instruments.
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The impact of the adoption of these standards on the Company’s financial statements is as

follows:

Classification and measurement of financial assets

Financial assets - Debt instruments

The Company classifies financial assets - debt instruments as financial assets that are

subsequently to be measured at either amortised cost or fair value in accordance with the
Company’s business model for managing on the financial assets and the contractual cash
flow characteristics of the financial assets, based on the facts and circumstances as of the

date these financial reporting standards were initially adopted. Classifications are as follows:

- Financial assets measured at amortised cost, when both of the following conditions are
met: the financial assets are held within a business model whose objective is to hold

assets in order to collect contractual cash flows; and the contractual terms of the
financial assets represent contractual cash flows that are solely payments of principal
and interest on the principal amount outstanding.