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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 291

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Financial assets (continued)

Measurement (continued)
(a) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the group
classifies its debt instruments:
(i) Amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss, together with foreign exchange gains and losses.
Impairment losses are presented as separate line item in profit or loss.

(ii) FVOCI
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements
in the carrying amount are taken through other comprehensive income, except for the recognition of
impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised
in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised
in other comprehensive income is reclassified from equity to profit or loss. Interest income from these
financial assets is included in finance income using the effective interest rate method. Foreign exchange
gains and losses are recognised in profit or loss and impairment expenses are presented as separate line
item in profit or loss.
(iii) FVPL
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on
a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises.
(b) Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management has
elected to present fair value gains and losses on equity investments in other comprehensive income, there is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments continue to be recognised in profit or loss as other income when
the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are
not reported separately from other changes in fair value.