Kenanga Investment Bank Berhad Annual Report 2021 166 Our Sustainability Approach About This Report We Are Kenanga Message From Chairman and GMD 3. ACCOUNTING POLICIES (CONT’D.) 3.4 Summary of significant accounting policies (cont’d.) (f) Financial instruments - initial recognition (cont’d.) (iii) Measurement categories of financial assets and liabilities The Group and the Bank classify all of their financial assets based on the business model for managing the assets and the asset’s contractual terms, measured at either: (a) Amortised cost, as explained in Note 3.4(g)(i) (b) FVOCI, as explained in Notes 3.4(g)(v) and 3.4(g)(vi) (c) FVTPL, as explained in Notes 3.4(g)(iv) and 3.4 (g)(viii) The Group and the Bank classify and measure their derivative and trading portfolio at FVTPL as explained in Notes 3.4(g)(ii) and 3.4(g)(iv). The Group and the Bank may designate financial instruments at FVTPL, if doing so eliminates or significantly reduces measurement or recognition inconsistencies, as explained in Note 3.4(g)(viii). Financial liabilities, other than loan commitments and financial guarantees, are measured at amortised cost or at FVTPL when they are held for trading and derivative instruments or the fair value designation is applied, as explained in Note 3.4(g)(viii). Financial liabilities are recognised in the statements of financial position when, and only when, the Group and the Bank become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. (g) Financial assets and liabilities (i) Due from banks, loans and advances to customers, financial investments at amortised cost The Group and the Bank measure amounts due from banks, loans and advances to customers and other financial investments at amortised cost if both of the following conditions are met: • The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Notes to the Financial Statements 31 December 2021
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