Page 156 - KWAP_AR2022

154 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) FoR BEttER REtURNS

notes to the
financial statements
for the year ended 31 december 2022

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.7 Financial Assets (continued)

(b) Classification and subsequent measurement
the group and KWap applied mfrs 9 and classify their financial assets in the following measurement
categories – amortised cost, fair Value through other comprehensive income (fVoci) or fVtpl.

if the terms are not substantially different, the renegotiation or modification does not result in derecognition,
and the group and the company recalculate the gross carrying amount based on the revised cash flows
of the financial asset and recognise a gain or loss on remeasurement in profit or loss. the new gross
carrying amount is recalculated by discounting the modified cash flows at the original effective interest rate
(or credit-adjusted effective interest rate for purchased or originated credit-impaired (“poci”) financial assets).

the classification requirements for debt and equity instruments are described below:
1. Debt instruments
debt instruments are instruments that satisfy the definition of a financial liability from the issuer’s
perspective. the classification and subsequent measurement of debt instruments are dependent on
the group’s and KWap’s business model for managing the asset and the cash flow characteristics of
the asset. based on these factors, the group and KWap classify their debt instruments into one of the
following three (3) measurement categories:
Amortised Cost
financial assets that are held for the collection of contractual cash flows where those cash flows
represent solely payments of principal and interest (sppi), and are not designated at fVtpl,
are measured at amortised cost using the effective interest method. the carrying amount of these
assets is adjusted by impairment losses recognised and measured using the expected credit loss (ecl)
model. interest income on financial assets measured at amortised cost is recognised in the statement
of comprehensive income and presented as interest income. the losses arising from impairment of
financial instruments are recognised in the statement of comprehensive income as allowance made
for impairment losses. the losses arising from impairment of financial assets other than financial
instruments are recognised in the statement of comprehensive income as impairment on other assets.
FVOCI

financial assets that are held for the collection of contractual cash flows and subsequent sale of the
assets, where the assets’ cash flows represent sppi, and are not designated at fVtpl, are measured at
fVoci. the changes in fair value are recognised through other comprehensive income, except for the
recognition of impairment losses which are measured using the ecl model, interest income and foreign
exchange gains or losses on the financial assets’ amortised cost are recognised in profit or loss. interest
earned whilst holding the financial assets are recorded as interest income using the effective interest
method. upon derecognition, the cumulative gain or loss previously recognised in other comprehensive
income is reclassified to profit or loss and presented in gains or loss from divestment.
FVTPL

financial assets that do not satisfy the criteria for amortised cost or fVoci, including financial assets
held-for-trading (hft) and derivatives, are measured at fVtpl. upon derecognition, the gain or loss
on a financial asset that is subsequently measured at fVtpl and is not part of a hedging relationship
is recognised in profit or loss and presented as gains or loss from divestment. interest earned whilst
holding the financial assets are reported as interest income in profit or loss.