Page 78 - Statement of Intent 2015/16

Instruments at fair value through the statement of comprehensive income
An instrument is measured as at fair value through the statement of comprehensive income if it is held for trading or is designated as such upon initial recognition. Instruments are measured at fair value through the statement of comprehensive income. Upon initial recognition, attributable transaction costs are recognised in the statement of comprehensive income when incurred. Subsequent to initial recognition, changes to the fair value of financial instruments are recognised in the statement of comprehensive income.
Investments in equity securities
Investments in equity securities are classified as available-for-sale, except for investments in equity securities of subsidiaries, associates and joint ventures which are measured at cost.
The fair value of equity investments classified as available-for-sale is their quoted bid price at the balance date.
Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently stated at their amortised cost less impairment losses. Bad debts are written off during the period in which they are identified.
Trade and other payables
Trade and other payables are stated at amortised cost using the effective interest rate. Creditors and payables are non-interest bearing and normally settled on 30-day terms. Therefore, the carrying value of creditors and other payables approximates their fair value.
Hedging
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognised directly in equity. When the forecast transaction subsequently results in the recognition of a non-financial asset or liability, or the forecast transaction becomes a firm commitment, the associated cumulative gain or loss is removed from equity and included in the initial cost or other carrying amount of the non-financial asset or liability. If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or liability, the associated gains and losses that were recognised directly in equity are reclassified into the statement of comprehensive income in the same period or periods during which the asset acquired or liability assumed affects the statement of comprehensive income (i.e. when interest income or expense is recognised). For cash flow hedges, other than those covered by the preceding two policy statements, the associated cumulative gain or loss is removed from equity and recognised in the statement of comprehensive income in the same period or periods during
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