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NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2015
106
BLUE LABEL INTEGRATED ANNUAL REPORT 2015
1.
SIGNIFICANT ACCOUNTING POLICIES continued
Financial instruments continued
Financial liabilities continued
The particular recognition methods adopted are disclosed in the individual accounting policy
statements associated with each item.
Regular way purchases and sales of financial assets that require delivery are recognised on trade date,
being the date on which the Group commits to purchase or sell the asset.
The Group recognises a financial asset or a financial liability on its statement of financial position
when, and only when, the Group becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the financial asset have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership. Financial liabilities (or a part of a financial liability) are removed from its statement of
financial position when, and only when, they are extinguished, i.e. when the obligation specified in
the contract is discharged, cancelled or expires.
Financial assets
The Group classifies its financial assets in the following categories: loans and receivables, and cash
and cash equivalents. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its investments at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. This category does not include those loans and receivables that the
Group intends to sell in the short term or that it has designated as at fair value through profit or loss
or available-for-sale. These assets are included in current assets, except for maturities greater than
12 months after the statement of financial position date, which are classified as non-current assets.
Financial assets classified as loans and receivables are initially recognised at fair value plus transaction
costs. Subsequent to initial recognition, loans and receivables are carried at amortised cost using the
effective interest rate method, less any provision for impairment.
Loans and receivables comprise loans receivable, trade and other receivables (excluding prepayments
and VAT) and cash and cash equivalents.