Page 164 - InterloopAnnualReport2020

NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

Fair value through other comprehensive income (FVTOCI)
Financial assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured at
FVTOCI. Movements in the carrying amount are taken through other comprehensive income, except
for the recognition of impairment losses (and reversal of impairment losses), interest income and
foreign exchange gains and losses which are recognized in profit or loss. When the financial asset
is derecognized, the cumulative gain or loss previously recognized in other comprehensive income
is reclassified from equity to profit or loss and recognized in other income / (other expenses). Interest
income from these financial assets is included in other income using the effective interest rate method.
Foreign exchange gains and losses are presented in other income/ (other expenses) and impairment
losses are presented as separate line item in the statement of profit or loss.

Fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily
required to be measured at fair value. Financial assets are classified as held for trading if they are
acquired for the purpose of selling or repurchasing in the near term. Financial assets with cash flows
that are not solely payments of principal and interest are classified and measured at fair value through
profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be
classified at amortized cost or at fair value through OCI, as described above, debt instruments may be
designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly
reduces, an accounting mismatch.

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair
value with net changes in fair value recognized in the statement of profit or loss.

B. Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized when:

The rights to receive cash flows from the asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ‘pass–through’
arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the
asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a
pass–through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of
ownership.

When it has neither transferred nor retained substantially all of the risks and rewards of the asset,
nor transferred control of the asset, the Company continues to recognize the transferred asset to the
extent of its continuing involvement. In that case, the Company also recognizes an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the maximum amount of consideration that the
Company could be required to repay.

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