D-Link 2014 Annual Report Download - page 32

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9
D-LINK CORPORATION AND SUBSIDIARIES
Notes to the consolidated financial statements
(Continued)
(ii) Available-for sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as
available-for-sale or are not classified in any of the other categories of financial assets.
Available-for-sale financial assets are recognized initially at fair value, plus, any directly
attributable transaction cost. Subsequent to initial recognition, they are measured at fair
value, and changes therein, other than impairment losses and dividend income are
recognized in other comprehensive income and accumulated under unrealized gains (losses)
on available-for-sale financial assets in equity. When an investment is derecognized, the
gain or loss accumulated in equity is reclassified to non-operating income and expense, and
is 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.
Investments in equity instruments that do not have a quoted market price in an active
market, and whose fair value cannot be reliably measured, are measured at amortized cost,
and are included in financial assets measured at cost.
Dividend income is recognized in profit or loss on the date that the Consolidated Company
receive dividend payment, which is normally the ex-dividend date and such dividend
income is recognized as other income.
(iii) Receivables
Receivables are financial assets with fixed or determinable payments that are not quoted in
an active market. Receivables comprise notes receivables, account receivables and other
receivables. Such assets are recognized initially at fair value, plus, any directly attributable
transaction costs. Subsequent to initial recognition, receivables are measured at amortized
cost using the effective interest method, less, any impairment losses other than insignificant
interest on short-term receivables.
(iv) Impairment of financial assets
A financial asset is impaired if, and only if, there is objective evidence of impairment as a
result of one or more events that occurred after the initial recognition of the asset (a ‘loss
event’) and that loss event (or events) has an impact on the estimated future cash flows of
the financial asset that can be estimated reliably.
Objective evidence that financial assets are impaired includes default or delinquency by a
debtor, restructuring of an amount due to the Consolidated Company on terms that the
Consolidated Company would not consider otherwise, indications that a debtor or issuer
will enter bankruptcy, adverse changes in the payment status of borrowers or issuers,
economic conditions that correlate with defaults, or the disappearance of an active market
for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost is accounted for as objective evidence of
impairment.