KENANGA ANNUAL REPORT 2018

NOTES TO THE FINANCIAL STATEMENTS 31 December 2018 146 KENANGA INVESTMENT BANK BERHAD 3. ACCOUNTING POLICIES (CONT’D.) 3.4 Summary of significant accounting policies (cont’d.) (k) Impairment of financial assets (cont’d.) (Policy applicable before 1 January 2018) (i) Financial investments held-to-maturity Evidence of impairment may include indications that the debt issuer is experiencing significant financial difficulty and default or delinquency in interest or principal repayments. For financial investments carried at amortised cost in which there is objective evidence of impairment, impairment loss is measured as the difference between the carrying amount and the present value of the estimated future cash flows discounted at the original EIR. The amount of the impairment loss is recognised in profit or loss. (ii) Financial investments AFS Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that financial investments classified as AFS are impaired. The cumulative impairment loss is measured as the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss previously recognised in profit or loss. Impairment losses on investment in equity instruments classified as AFS recognised are not reversed in profit or loss subsequent to their recognition. Increase in fair value, if any, subsequent to the impairment loss is recognised in other comprehensive income. Reversals of impairment losses on debt instruments classified as AFS are recognised in profit or loss if the increase in fair value can be objectively related to an event occurring after the recognition of the impairment loss in other comprehensive income.