The company only enters into basic financial instrument transactions taht result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receiveable within one year), including loans and other accountr receivable and payable, are initially measured at present value of the future vash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receiveable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the paymetn or a trade debt deferred beyone normal business terms or financed at a rate of interest that is not a market rate ir in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at present value of the future cash flow discounted at a market rate of interest for a
similar debt instrument and subsequently at amortised cost.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an assets carrying amount and the present value of estimated cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discout rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an assets carrying amount and best estimate of the recoverable amount, whichis an approximation of the amount that the company wuld receive for the asset if it were to be sold at the reporting date.