Page 96 - ACCESS ANNUAL REPORT 2019

NOTES (continued)
S ar o significant acco nting po icies contin ed Financia assets and iabi ities
Measurement methods
A ortised cost and effective interest rate
he amortised cost is the amount at which the financial asset or financial lia ility is measured at initial reco nition minus the principal repayments, plus or minus the cumulative amortisation usin the effective interest method o any difference etween that initial amount and the maturity amount and, or financial assets, ad usted or any loss allowance.
he effective interest rate is the rate that exactly discounts estimated uture cash payments or receipts throu h the expected li e o the financial asset or financial lia ility to the ross carryin amount o a financial asset i.e. its amortised cost e ore any impairment allowance or to the amortised cost o a financial lia ility. he calculation does not consider expected credit losses and includes transaction costs, premiums or discounts and ees and points paid or received that are inte ral to the effective interest rate, such as ori ination ees. or purchased or ori inated credit impaired POCI’ financial assets assets that are credit impaired at initial reco nition the Group calculates the credit ad usted effective interest rate, which is calculated ased on the amortised cost o the financial asset instead o its ross carryin amount and incorporates the impact o expected credit losses in estimated uture cash ows.
hen the Group revises the estimates o uture cash ows, the carryin amount o the respective financial assets or financial lia ility is ad usted to re ect the new estimate discounted usin the ori inal effective interest rate. Any chan es are reco nised in profit or loss.
nitia recognition and eas re ent
inancial assets and financial lia ilities are reco nised when the entity ecomes a party to the contractual provisions o the instrument. Re ular way purchases and sales o financial assets are reco nised on trade date, the date on which the Group commits to purchase or sell the asset.
nitia recognition and eas re ent contin ed
At initial reco nition, the Group measures a financial asset or financial lia ility at its air value plus or minus, in the case o a financial asset or financial lia ility not at air value throu h profit or loss, transaction costs that are incremental and directly attri uta le to the ac uisition or issue o the financial asset or financial lia ility, such as ees and commissions. ransaction costs o financial assets and financial lia ilities carried at air value throu h profit or loss are expensed in profit or loss. Immediately a ter initial reco nition, an expected credit loss allowance EC is reco nised or financial assets measured at amortised cost and investments in de t instruments measured at air value throu h other comprehensive income, which results in an accountin loss ein reco nised in profit or loss when an asset is newly ori inated.
hen the air value o financial assets and lia ilities differs rom the transaction price on initial reco nition, the entity reco nises the difference as ollows
a hen the air value is evidenced y a uoted price in an active mar et or an identical asset or lia ility i.e. a evel 1 input or ased on a valuation techni ue that uses only data rom o serva le mar ets, the difference is reco nised as a ain or loss.
In all other cases, the differences is de erred and the timin o reco nition o de erred day one profit or loss is determined individually. It is either amortised over the li e o the instrument, de erred until the instrument’s air value can e determined usin mar et o serva le inputs, or realised throu h settlement.
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