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enricHing national Progress ENRICHING SUSTAINABLE RETURNS

notes to tHe financial statements

for the year ended 31 december 2023

2. MATERiAL ACCOUNTiNG POLiCiES (CONTiNUED)
2.7 Financial Assets (continued)

(b) Classification and subsequent measurement (continued)

1. Debt instruments (continued)
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.
Business model assessment

the group and KWap assess the objective of a business model in which a financial asset is held at
a portfolio level which best reflects the way the business is managed and information is provided to
management. the factors under consideration include policies and objectives for the portfolio and
the operation of those policies in practice. in particular, whether management’s strategy focuses on
earning the contractual interest revenue, maintenance of a particular interest rate profile, matching the
duration of the financial assets to the duration of the financial liabilities that are funding the said assets
or realisation of cash flows through the sale of the financial assets.
other factors under consideration also include the frequency, volume and timing of sales in prior periods,
evaluation of the financial asset’s performance, the reporting to key management personnel as well as
the assessment and management of the risks.

Reclassification of debt investments
the group and KWap reclassify debt instruments when and only when there is a change in the business
model for managing those said assets.

2. Equity instruments
equity instruments are instruments that satisfy the definition of equity from the issuer’s perspective;
that is, instruments that do not contain a contractual obligation to pay and that evidence a residual
interest in the issuer’s net assets.

upon initial recognition, the group and KWap may occasionally elect to classify irrevocably an
equity instrument that is not held for trading at fVoci. such classification is determined on an
instrument-by-instrument basis. When this election is used, the fair value gains and losses are recognised
in other comprehensive income and are not subsequently reclassified to profit or loss, including upon
disposal. dividends earned whilst holding the equity instrument are recognised in the statement of
comprehensive income and presented as dividend income upon the establishment of the right to
receive the payment.
upon derecognition, the gains and losses on equity instruments at fVtpl, is recognised in the statement
of comprehensive income and presented as gain or loss from divestment.
158 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) i INTEGRATED REPORT 2023