50
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.3 Financial instruments (cont’d)
(ii) Non-derivative financial liabilities (cont’d)
The Group classifies non-derivative financial liabilities into the other financial
liabilities category. Such financial liabilities are recognised initially at fair value
plus any directly attributable transaction costs. Subsequent to initial recognition,
these financial liabilities are measured at amortised cost using the effective
interest method.
Other financial liabilities comprise loans and borrowings, and trade and other
payables.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable
to the issue of ordinary shares are recognised as a deduction from equity, net of
any tax effects.
(iv) Derivative financial instruments
When a derivative financial instrument is not designated in a hedge relationship
that qualifies for hedge accounting, the derivative is recognised initially at fair
value and any attributable transaction costs are recognised in profit or loss
as incurred. Subsequent to initial recognition, all changes in its fair value are
recognised immediately in profit or loss.
(v) Intra-group financial guarantees in the separate financial statements
Financial guarantees are financial instruments issued by the Company that
require the issuer to make specified payments to reimburse the holder for the loss
it incurs because a specified debtor fails to meet payment when due in accordance
with the original or modified terms of a debt instrument.
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.3 Financial instruments (cont’d)
(v) Intra-group financial guarantees in the separate financial statements (cont’d)
Financial guarantees are recognised initially at fair value and are classified as
financial liabilities. Subsequent to initial measurement, the financial guarantees
are stated at the higher of the initial fair value less cumulative amortisation and
the amount that would be recognised if they were accounted for as contingent
liabilities. When financial guarantees are terminated before their original expiry
date, the carrying amount of the financial guarantee is transferred to profit or loss.
3.4 Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses except for leasehold buildings
which are stated at their revalued amounts. The revalued amount is the fair
value at the date of revaluation less any subsequent accumulated depreciation
and subsequent accumulated impairment losses. Revaluations are carried out
by independent professional valuers regularly such that the carrying amount of
these assets does not differ materially from that which would be determined
using fair values at the reporting date. Any accumulated depreciation at the date
of revaluation is eliminated against the gross carrying amount of the asset, and
the net amount is restated to the revalued amount of the asset.
Any increase in the revaluation amount is credited to the other comprehensive
income and shown as revaluation reserve in equity. Decreases that offset
previous increases of the same asset are charged in other comprehensive income
and debited against revaluation reserve directly in equity; all other decreases are
charged to the profit or loss. Each year the difference between depreciation based
on the revalued carrying amount of the asset charged to the profit or loss, and
depreciation based on the asset’s original cost is transferred from revaluation
reserve to retained earnings.
