Page 193 - Interloop Annual Report 2018-2019

NOTES TO THE CONSOLIDATED NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2019 FOR THE YEAR ENDED JUNE 30, 2019

segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to the transactions with any Key changes in accounting policies resulting from application of IFRS 9
of the Company’s other components. An operating segment’s operating results are reviewed regularly
by the chief operating decision maker (‘CODM’) to make decisions about resources to be allocated A. Classification and measurement of financial instruments
to the segment and assess its performance, and for which discrete financial information is available. a) Investments and other financial assets
The CODM, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors of the Company that makes the strategic Classification:
decisions.
The Company classifies its financial assets in the following measurement categories:
Segment results that are reported to the CODM include items directly attributable to a segment as well - those to be measured subsequently at fair value (either through other comprehensive income, or
as those that can be allocated on a reasonable basis. Those incomes, expenses, assets, liabilities and through profit or loss), and
other balances which cannot be allocated to a particular segment on a reasonable basis are reported
as unallocated. - those to be measured at amortized cost

Transaction among the business segments are recorded at cost. Inter segment sales and purchases The classification depends on the Company’s business model for managing the financial assets
are eliminated from the total. and the contractual terms of the cash flows. In order for a financial asset to be classified and
measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that
6.23 Related party transactions are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at an instrument level. The Company’s
All transactions with related parties are carried out at agreed terms and conditions and on arm’s length business model for managing financial assets refers to how it manages its financial assets in order
basis. to generate cash flows.

7. CHANGES IN ACCOUNTING POLICIES DUE TO APPLICABILITY OF CERTAIN INTERNATIONAL For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
FINANCIAL REPORTING STANDARDS (IFRS) comprehensive income. For investments in debt instruments, this will depend on the business
model in which the investment is held. For investments in equity instruments, this will depend
7.1 IFRS 9, ‘Financial Instruments’ on whether the Company has made an irrevocable election at the time of initial recognition to
account for the equity investment at fair value through other comprehensive income. The Company
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial reclassifies debt investments when and only when its business model for managing those assets
liability or equity instrument of another entity. changes.

7.1.1 Financial assets Measurement:

The standard introduced new classification and measurement models for financial assets. A financial At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a
asset shall be measured at amortized cost if it is held in order to collect contractual cash flows which financial asset not at fair value through profit or loss, transaction costs that are directly attributable
arise on specified dates and that are ‘solely payment of principal and interest (SPPI)’ on the principal to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value
amount outstanding. A debt investment shall be measured at fair value through other comprehensive through profit or loss are expensed in profit or loss.
income if it is held in order to collect contractual cash flows which arise on specified dates that are solely
principal and interest and as well as selling the asset on the basis of its fair value. All other financial Financial assets with embedded derivatives are considered in their entirety when determining
assets are classified and measured at fair value through profit or loss unless the Company makes an whether their cash flows are solely payment of principal and interest.
irrevocable election on initial recognition to present gains and losses on equity instruments in other
comprehensive income. Despite these requirements, a financial asset may be irrevocably designated i) Debt instruments
as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting Subsequent measurement of debt instruments depends on the Company’s business model for 2018 - 19
Interloop Limited mismatch. managing the asset and the cash flow characteristics of the asset. There are three measurement Annual Report

categories into which the Company classifies its debt instruments:

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