Singapore Airlines 2011 Annual Report Download - page 113

ANNUAL REPORT 2010/2011 111
NOTES TO THE FINANCIAL STATEMENTS
31 March 2011
2 Summary of Significant Accounting Policies (continued)
(q) Impairment of financial assets (continued)
(iii) Available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of
the issuer or obligor, and the disappearance of an active trading market are considerations to
determine whether there is objective evidence that investment securities classified as available-
for-sale financial assets are impaired.
If an available-for-sale asset is impaired, an amount comprising the difference between its cost
(net of any principal repayment and amortisation) and its current fair value, less any impairment
loss previously recognised in the profit and loss account, is transferred from other comprehensive
income to the profit and loss account. Reversals of impairment losses in respect of equity
instruments are not recognised in the profit and loss account; increase in the fair value after
impairment are recognised directly in other comprehensive income.
(r) Financial liabilities
Financial liabilities are classified as either financial liabilities “at fair value through profit or loss” or
other financial liabilities.
Financial liabilities are recognised on the statement of financial position when, and only when, the
Group becomes a party to the contractual provisions of the financial instrument. The Group determines
the classification of its financial liabilities at initial recognition.
Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities other
than derivatives, directly attributable transaction costs.
Subsequent to initial recognition, derivatives are measured at fair value. Other financial liabilities
(except for financial guarantee) are measured at amortised cost using the effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability,
and the difference in the respective carrying amounts is recognised in the profit or loss account.
(s) Loans, notes payable and borrowings
Loans, notes payable and other borrowings are initially recognised at the fair value of the consideration
received less directly attributable transaction costs. After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost using the effective interest method.