Page 44 - AOB 2018 (ENG)

Audit
Oversight
Board
ANNUAL
REPORT
2018

Interest income is recognised by applying effective interest rate to the gross carrying
amount except for credit impaired financial assets (see Note 3(c)) where the effective
interest rate is applied to the amortised cost.

Previous financial year

In the previous financial year, financial assets of the AOB were classified and measured
under MFRS 139, Financial Instruments: Recognition and Measurement as follows:

Loans and receivables

Financial assets categorised as loans and receivables was subsequently measured at
amortised cost using the effective interest method.

All financial assets were subject to review for impairment (see Note 3(c)).

Financial liabilities

Current financial year

The category of financial liabilities at initial recognition is as follows:

Amortised cost

Financial liabilities not categorised as fair value through profit or loss are subsequently
measured at amortised cost using the effective interest method.

Interest expense is recognised in the profit or loss. Any gains or losses on derecognition
are also recognised in the profit or loss.

Previous financial year

All financial liabilities were subsequently measured at amortised cost.

(iii) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights
to the cash flows from the financial asset expire or transferred, or control of the asset
is not retained or substantially all of the risks and rewards of ownership of the financial
asset are transferred to another party. On derecognition of a financial asset, the difference
between the carrying amount and the sum of the consideration received (including any
new asset obtained less any new liability assumed) is recognised in the profit or loss.

42 | PART TWO STATEMENTS

T_2018 AOB AR PART 2.indd 42 10/04/2019 5:11 PM