D-Link 2014 Annual Report Download - page 31

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8
D-LINK CORPORATION AND SUBSIDIARIES
Notes to the consolidated financial statements
(Continued)
An entity shall classify a liability as current when:
(1) It expects to settle the liability in its normal operating cycle;
(2) It holds the liability primarily for the purpose of trading;
(3) The liability is due to be settled within twelve months after the reporting period; or
(4) It does not have an unconditional right to defer settlement of the liability for at least twelve
months after the reporting period. Terms of a liability that could, at the option of the counterparty,
result in it is settlement by the issue of equity instruments do not affect its classification.
An entity shall classify all other liabilities as non-current.
(g) Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and all highly liquid investments
subject to insignificant risk of changes in value.
A time deposit is qualified as a cash equivalent when it is held for the purpose of short-term cash
commitments rather than for investment or other purposes.
(h) Financial Instruments
Financial assets and financial liabilities are initially recognized when the Consolidated Company
becomes a party to the contractual provisions of the instruments.
(1) Financial assets
The Consolidated Company classifies financial assets into the following categories: financial
assets at fair value through profit or loss, account receivables, available-for-sale financial assets
and financial assets at cost value.
(i) Financial assets at fair value through profit or loss
A financial asset is classified in this category if it is classified as held-for-trading.
Financial assets are classified as held-for-trading if they are acquired principally for the
purpose of selling or repurchasing in the short term.
This type of financial asset is measured at fair value at the time of initial recognition, and
the attributable transaction costs are recognized in profit or loss as incurred. Financial
assets at fair value through profit or loss are measured at fair value and changes therein,
which takes into account any dividend and interest income, are recognized in non-operating
income and expense, and are included in other profit and loss. A regular way purchase or
sale of financial assets shall be recognized and derecognized, as applicable, using trade date
accounting.