Singapore Airlines 2016 Annual Report Download - page 129

2 Summary of Significant Accounting Policies (continued)
(r) Financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial
liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date
that the Group becomes a party to the contractual provisions of the financial instrument.
All financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities not carried at fair value through profit or
loss, directly attributable transaction costs.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial
liability is replaced by another from the same lender on substantially dierent 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 dierence in the respective carrying amounts is recognised in the profit and loss account.
The measurement of financial liabilities depends on their classification as follows:
(i) Financial liabilities at fair value through profit or loss
Financial liabilities carried at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they
are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the
Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified
as held for trading unless they are designated as eective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses
arising from changes in the fair value of the financial liabilities are recognised in the profit and loss account.
The Group has not designated any financial liabilities upon initial recognition as carried at fair value through profit or loss.
(ii) Other financial liabilities
Aer initial recognition, other financial liabilities are subsequently measured at amortised cost using the eective interest rate
method. Gains and losses are recognised in the profit and loss account when the liabilities are derecognised, and through the
amortisation process.
(s) Osetting of financial assets and liabilities
Financial assets and financial liabilities are oset and the net amount is presented in the balance sheets, when and only when, there is a
currently enforceable legal right to set o the recognised amounts and there is an intention to settle on a net basis, or to realise the assets
and settle the liabilities simultaneously.
(t) 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. Aer initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
eective interest method.
Gains and losses are recognised in the profit and loss account when the liabilities are derecognised as well as through the amortisation
process.
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