Epson 2015 Annual Report Download - page 60

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59
(ii) Subsequent Measurement
After initial recognition, financial assets are measured based on the classification as follows:
(a) Financial Assets Measured at Amortised Cost
Financial assets measured at amortised cost are measured at amortised cost using the effective interest method.
(b) Other Financial Assets
Financial assets other than those measured at amortised cost are measured at fair value.
Changes in fair value of financial assets measured at fair value are recognised as profit or loss. However,
changes in fair value of equity instruments designated as measured at fair value through other comprehensive
income are recognised as other comprehensive income and the amount in other comprehensive income is
transferred to retained earnings when equity instruments are derecognised or the decline in its fair value is
significant. Dividends on the financial assets are recognised in profit or loss for each fiscal year.
(iii) Derecognition
Financial assets are derecognised when the contractual rights to the cash flows from them expire or when they are
transferred in transactions in which substantially all the risks and rewards of ownership are transferred.
(B) Impairment of Financial Assets
At the end of each fiscal year, Epson assesses whether there is any objective evidence that financial assets
measured at amortised cost are impaired. Evidence of impairment includes significant financial difficulty of the
borrower or a group of borrowers, a default or delinquency in interest or principal payments, and bankruptcy of the
borrower. Epson assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant and collectively for financial assets that are not individually significant.
If there is any objective evidence that impairment losses on financial assets measured at amortised cost have been
incurred, the amount of the loss is measured as the difference between the asset’ s carrying amount and the present
value of estimated future cash flows.
When impairment is recognised, the carrying amount of the financial asset is reduced by an allowance account for
credit losses and impairment losses are recognised in profit or loss. The carrying amount of financial assets
measured at amortised cost is directly reduced for the impairment when they are expected to become uncollectible
in the future and all collaterals are implemented or transferred to Epson.
If the amount of the impairment losses provided decreases due to an event occurring after the impairment was
recognised, the previously recognised impairment losses are reversed into profit through the allowance account for
credit losses.
(C) Financial Liabilities
(i) Initial Recognition and Measurement
Financial liabilities are classified into financial liabilities measured at fair value through profit or loss and
financial liabilities measured at amortised cost. Epson determines the classification at initial recognition.
All financial liabilities are measured at fair value at initial recognition. However, financial liabilities measured at
amortised cost are measured at cost after deducting transaction costs that are directly attributable to the financial
liabilities.
(ii) Subsequent Measurement
After initial recognition, financial liabilities are measured based on the classification as follows:
(a) Financial Liabilities Measured at Fair Value through Profit or Loss
Financial liabilities measured at fair value through profit or loss include financial liabilities designated as
measured at fair value through profit or loss at initial recognition.
(b) Financial Liabilities Measured at Amortised Cost
After initial recognition, financial liabilities measured at amortised cost are measured at amortised cost using
the effective interest method. Amortisation under the effective interest method and gains or losses on
derecognition are recognised as profit or loss in the consolidated statement of comprehensive income.
(iii) Derecognition
Financial liabilities are derecognised when the obligation is discharged, canceled or expired.