Asus 2015 Annual Report Download - page 249

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(20) Financial liabilities at fair value through profit or loss
A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or
financial liabilities designated as at fair value through profit or loss on initial recognition.
Financial liabilities are classified in this category of held for trading if held principally for the
purpose of repurchasing in the short-term. Derivatives are also categorized as financial
liabilities held for trading unless they are designated as hedges. Financial liabilities that meet
one of the following criteria are designated as at fair value through profit or loss on initial
recognition:
(A) Hybrid (combined) contracts; or
(B) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(C) They are managed and their performance is evaluated on a fair value basis, in accordance
with a documented risk management policy.
B. Financial liabilities at fair value through profit or loss are initially recognized at fair value.
Related transaction costs are expensed in profit or loss. These financial liabilities are
subsequently remeasured and stated at fair value, and any changes in the fair value of these
financial liabilities are recognized in profit or loss.
(21) Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability specified in the
contract is discharged, cancelled or expires.
(22) 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.
(23) Derivative financial instruments
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.
(24) Provisions for liabilities
Provisions are recognized when the Company has a present legal or constructive obligation as a
result of past events, and it is probable that an outflow of economic resources will be required to
settle the obligation and the amount of the obligation can be reliably estimated. Provisions are
measured at the present value of the expenditures expected to be required to settle the obligation
on the end of the financial reporting period, which is discounted using a pre-tax discount rate that
reflects the current market assessments of the time value of money and the risks specific to the
obligation. When discounting is used, the increase in the provision due to passage of time is
recognized as interest expense. Provisions are not recognized for future operating losses.