Page 172 - UBP - IR2020

FINANCIAL STATEMENTS
Notes to the financial statements
For the year ended June 30 2020
2 ACCOUNTING POLICIES (CONTINUED)
2 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Financial instruments
Financial assets
Initial recognition and measurement
Financial assets
are classified at at initial recognition as as as as subsequently measured at at amortized cost fair value through other comprehensive income (OCI) and fair value through profit or loss The classification of financial financial assets
at at initial recognition depends on on on on the financial financial asset’s contractual cash flow characteristics and the the the Group’s business model for managing them With the the the exception of trade receivables that do not contain a a a a a a a a a significant financing component or or for which the the the Group Group has applied the the the practical expedient the the the Group Group initially measures a a a a a a a a a a a a a a a a financial financial asset asset at at its fair fair value value plus fin in fin the case of o a a a a a a a a a a a a a a a a financial financial asset asset not at at fair fair value value through profit or loss transaction costs Trade receivables that do not contain a a a a a a a a a a significant financing component or or for which the Group has applied the the the practical expedient are measured at the the the transaction price determined under IFRS 15 Refer to the the the accounting policies “Revenue from contracts with customers” In order for a a a a a a a a a a a financial asset to to be classified and measured at amortized cost or or or or fair value through OCI it needs to to give rise to cash flows that are ‘solely payments of principal principal and and interest (SPPI)’ on the principal principal amount outstanding This assessment is is referred to as as the SPPI test and is is performed at an an instrument level The Group’s business model for managing financial financial assets
assets
refers to to how it it manages its financial financial assets
assets
in in fin fin in order to to generate cash cash cash flows flows flows The business model determines whether cash cash cash flows flows flows will result from collecting contractual cash cash cash flows flows flows selling the financial assets
or both Purchases or or sales of of financial assets
assets
that require delivery of of assets
assets
within a a a a a a a a a a a time frame established by regulation or or convention in the the the the market place (regular way trades) are recognized on on on the the the the trade trade date date i i i i i e e e e e e e e e e e e e e e e the the the the date date that the the the the Group commits to purchase or sell the asset Subsequent measurement
For purposes of subsequent measurement
financial assets
are classified fin in four categories:
• Financial assets
at amortized cost (debt instruments)
• Financial assets
at at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
• Financial assets
designated at at at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
• Financial assets
at fair value through profit or loss Financial assets
at amortised cost (debt instruments)
This category is is is the the the most relevant to the the the Group Group The Group Group measures financial assets
at at amortised cost if both of the the the following conditions are met:
• The financial financial asset asset is held within a a a a a a a business model with with the objective to to hold financial financial assets
fin in in fin in order to to collect contractual cash flows and • The contractual terms of of the financial asset give rise on on specified dates to cash flows that are solely payments of of principal principal and and interest on the principal principal amount outstanding 172 - UBP INTEGRATED REPORT 2020