Page 172 - KWAP_AR2022

170 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) FoR BEttER REtURNS

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

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.19 Impairment Of Financial Assets (continued)

(a) Financial assets accounted for at Amortised Cost and FVOCI (continued)

Definition of default and credit-impaired financial assets (continued)
(b) Qualitative criteria:

satisfies the criteria of unlikeliness to pay by the counterparty, which indicates its significant financial
difficulty such as the following instances:

• breach of financial covenants;
• concessions made by the lender relating to the counterparty’s financial difficulty;
• high probability of bankruptcy or other financial reorganization;
• insolvency; and
• disappearance of an active market for the financial asset due to financial difficulties.
credit-impairment of financial instruments is assessed on an individual basis by the group and KWap.

(b) Write off of financial assets
the group and KWap write off financial assets, in whole or in part, when it has exhausted all practical
recovery efforts and subsequently concluded that there is no reasonable expectation of recovery. the
assessment of no reasonable expectation of recovery is based on the inability of the debtor’s sources of
income or assets to generate sufficient future cash flows to repay the outstanding amount. the group and
KWap may write-off financial assets that are still subject to enforcement activity.

2.20 Derivative Financial Instruments

derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period. changes in the fair value of any
derivative instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and
included in the net gain or loss on fair value movement of derivatives.

2.21 Employee Benefits
(a) Short term benefits

Wages, salaries, bonuses, social security contributions (socso), employees provident fund (epf)
contribution or pension contribution and gratuity to contract employees are recognised as expenses in the
year in which the associated services are rendered by the employees of the group. short term accumulating
compensated absences such as paid annual leave are recognised when the services are rendered by the
employees which subsequently increase the employees’ entitlement to future compensated absences.
meanwhile, short term non-accumulated compensated absences such as sick leave are recognised when
the absences occur.