150 / 276
ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
148
Tiger Brands Limited Integrated Annual Report
2014
to estimate the recoverable amount of an individual
asset, the recoverable amount of the cash-generating
unit to which the asset belongs is estimated.
In assessing value in use, the estimated future cash
flows are discounted to their present value using an
appropriate pre-tax discount rate that reflects current
market assessments of the time value of money and
the risks specific to the asset. In determining fair value
less cost of disposal, the fair value is determined in
terms of IFRS 13. This is measured using the
assumptions that market participants would use when
pricing the asset, assuming that market participants
act in their economic best interest. A fair value
measurement of a non-financial asset takes into
account a market participant’s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
Impairment losses of continuing operations are
recognised in profit or loss in those expense
categories consistent with the function of the
impaired asset.
For assets excluding goodwill, an assessment is
made at each reporting date as to whether there is
any indication that previously recognised impairment
losses may no longer exist or may have decreased.
If such an indication exists, the group estimates the
asset’s or cash-generating unit’s recoverable amount.
A previously recognised impairment loss is reversed
only if there is a change in the estimates used to
determine the asset’s recoverable amount since the
last impairment loss was recognised. If this is the
case, the carrying amount of the asset is increased
to the revised recoverable amount, but not in excess
of what the carrying amount would have been had
there been no impairment. A reversal of an
impairment loss is recognised directly in profit
or loss.
Financial instruments
Financial instruments are initially recognised when the
group becomes a party to the contract. The group
has adopted trade date accounting for “regular way”
purchases or sales of financial assets. The trade date
is the date that the group commits to purchase or sell
an asset.
Financial instruments are initially measured at fair value
plus transaction costs, except that transaction costs in
respect of financial instruments classified at fair value
through profit or loss are expensed immediately.
Transaction costs are the incremental costs that are
directly attributable to the acquisition of a financial
instrument, ie those costs that would not have been
incurred had the instrument not been acquired.
A contract is assessed for embedded derivatives
when the entity first becomes a party to the contract.
When the economic characteristics and risks of the
embedded derivative are not closely related to the
host contract, the embedded derivative is separated
out, unless the host contract is measured at fair value
through profit or loss.
The group determines the classification of its financial
instruments at initial recognition.
Classification
The group’s classification of financial assets and
financial liabilities are as follows:
Description of asset/liability Classification
Investments
Available for sale
Derivatives
Financial Instruments
at fair value through
profit or loss
Loans and advances
Loans and receivables
receivable
Loans to subsidiaries
Loans and receivables
Trade and other receivables Loans and receivables
Cash and cash equivalents Loans and receivables
Loans payable
Financial liabilities at
and borrowings
amortised cost
Trade and other payables
Financial liabilities at
amortised cost
Loans from subsidiaries
Financial liabilities at
amortised cost
Available-for-sale financial assets
These are non-derivative financial assets that are
designated as available for sale or are not classified
as loans and receivables or held-to-maturity
investments or financial assets at fair value through
profit or loss.