Asus 2015 Annual Report Download - page 184

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(23) Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability specified in the
contract is discharged, cancelled or expires.
(24) Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and reported in the net amount in the balance sheets when
there is a legally enforceable right to offset the recognized amounts and there is an intention to
settle on a net basis or realize the asset and settle the liability simultaneously.
(25) Derivative financial instruments and hedging activities
A. Derivatives are initially recognized at fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value. Any changes in the fair value are
recognized in profit or loss.
B. The Group designates certain derivatives as:
Hedges of the variability in cash flow associated with a recognized asset or liability or a highly
probable forecast transaction (cash flow hedge).
C. The Group documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions. The Group also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or cash flows of hedged
items.
D. The full fair value of a hedging derivative is classified as a non-current asset or liability when
the remaining maturity of the hedged item is more than 12 months, and as a current asset or
liability when the remaining maturity of the hedged item is less than 12 months. Trading
derivatives are classified as current assets or liabilities.
E. Cash flow hedge
(A) The effective portion of changes in the fair value of derivatives that are designated and
qualified as cash flow hedges is recognized in other comprehensive income. The gain or
loss relating to the ineffective portion is recognized immediately in the statement of
comprehensive income within “other gains (losses)”.
(B) When the forecast transaction that is hedged results in the recognition of a non-financial
asset or financial liability, the gains and losses previously deferred in other
comprehensive income are reclassified into profit or loss in the periods when the asset
acquired or the liability assumed affects profit or loss. The deferred amounts are
ultimately recognized in sales revenue.
(C) When a hedging instrument expires, is sold, cancelled, executed, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain or loss existing in
other comprehensive income at that time remains in other comprehensive income. When a