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JUMBO GROUP LIMITED
Notes to the Combined
Financial Statements
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement of an acquiree’s
share-based payment awards transactions with share-based payment awards transactions of the acquirer in accordance with the
method in FRS 102 Share-based Payment at the acquisition date; and
assets (or disposal groups) that are classified as held for sale in accordance with FRS 105
Non-current Assets Held for Sale and
Discontinued Operations
are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end of the financial year in which the combination occurs,
the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted
during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and
circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and
circumstances that existed as of the acquisition date and is subject to a maximum of one year from acquisition date.
FINANCIAL INSTRUMENTS - Financial assets and financial liabilities are recognised on the Group’s statement of financial position when
the Group becomes a party to the contractual provisions of the instrument.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments
through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an
effective interest basis for debt instruments other than those financial instruments at fair value through profit or loss.
Financial assets
Loans and receivables
Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans
and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest
is recognised by applying the effective interest rate method, except for short-term receivables when the recognition of interest would be
immaterial.
Available-for-sale financial assets
Available-for-sale financial assets are those non-derivative financial assets that are not classified into any of the other categories.
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 cost less impairment loss.
Financial assets at fair value through profit or loss
Financial assets are classified as at fair value through profit or loss where the financial asset is either held for trading or it is designated
as at fair value through profit or loss. Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain
or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the
financial asset.
Short term investments, comprising quoted equity shares, are classified as financial assets at fair value through profit or loss.
The fair value of investments that are actively traded in organised financial markets is determined by reference to the relevant exchange’s
quoted market bid prices at the close of business on the end of the financial year. For investments where there is no active market, fair
value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the
current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each
financial year. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.
For available-for-sale equity instruments, a significant or prolonged decline in the fair value of the investment below its cost is considered
to be objective evidence of impairment.
