QL Resources Berhad (428915-X)
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2. Significant accounting policies (Cont’d)
(b) Foreign currency (Cont’d)
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”) (Cont’d)
Foreign currency differences are recognised in other comprehensive income and accumulated in the FCTR in
equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of
the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of
such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to
that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the
relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group
disposes of only part of its investment in an associate that includes a foreign operation while retaining significant
influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.
(c) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when,
the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the
financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if,
and only if, it is not closely related to the economic characteristics and risks of the host contract and the host
contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded
derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the
host contract.
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for trading, including
derivatives (except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument), contingent consideration in a business combination or financial assets that are
specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair
values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their
fair values with the gain or loss recognised in profit or loss.
(b) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using
the effective interest method.
Notes to the Financial Statements
(Cont’d.)
