Kia 2012 Annual Report Download - page 60

(f) Non-derivative financial assets
The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair
value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. The
Company recognizes financial assets in the consolidated statements of financial position when the Company becomes a party to
the contractual provisions of the instrument.
Upon initial recognition, non-derivative financial assets are measured at their fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the asset’s acquisition or issuance.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS A financial asset is classified as financial assets are classified
at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Upon initial recognition,
transaction costs are recognized in profit or loss when incurred. Financial assets at fair value through profit or loss are measured at
fair value, and changes therein are recognized in profit or loss.
HELD-TO-MATURITY INVESTMENTS A non-derivative financial asset with a fixed or determinable payment and fixed maturity,
for which the Company has the positive intention and ability to hold to maturity, are classified as held-to-maturity investments.
Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method.
LOANS AND RECEIVABLES Loans and receivables are financial assets with fixed or determinable payments that are not quoted
in an active market. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective
interest method except for loans and receivables of which the effect of discounting is immaterial.
AVAILABLE-FOR-SALE FINANCIAL ASSETS Available-for-sale financial assets are those non-derivative financial assets that
are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity
investments or loans and receivables. Subsequent to initial recognition, they are measured at fair value, with changes in fair value,
net of any tax effect, recorded in other comprehensive income in equity. Investments in equity instruments that do not have a
quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and
must be settled by delivery of such unquoted equity instruments are measured at cost. When a financial asset is derecognized are
recognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit
or loss. Dividends on an available-for-sale equity instrument are recognized in profit or loss when the Company’s right to receive
payment is established.
DERECOGNITION OF FINANCIAL ASSETS The Company derecognizes a financial asset when the contractual rights to the cash
flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in
which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial
assets that is created or retained by the Company is recognized as a separate asset or liability.
If the Company retains substantially all the risks and rewards of ownership of the transferred financial assets, the Company
continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.
OFFSETTING BETWEEN FINANCIAL ASSETS AND FINANCIAL LIABILITIES Financial assets and financial liabilities are offset
and the net amount is presented in the consolidated statements of financial position only when the Company currently has a
legally enforceable right to offset the recognized amounts, and there is the intention to settle on a net basis or to realize the asset
and settle the liability simultaneously.
(g) Non-derivative financial liabilities
The Company classifies non-derivative financial liabilities into financial liabilities at fair value through profit or loss or other financial
liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities. The Company
recognizes financial liabilities in the consolidated statements of financial position when the Company becomes a party to the
contractual provisions of the financial liability.
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Financial liabilities at fair value through profit or loss
include financial liabilities held for trading or designated as such upon initial recognition. Subsequent to initial recognition, financial
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For the years ended December 31, 2012 and 2011
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