The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities lie trade and other debtor and trade and other creditors.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle the liability simultaneously.
Basis financial assets
Basic financial assets, which included trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangements constitutes a financing transaction, where the transaction is measure art he present value of the future receipts discounted at a market rate of interest. Financial assets classified as payable within one year are not amortised.
Basic financial liabilities
Basic financial liabilities, including trade and other creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers, Amount payable are classified as current liabilities if payment is due within one year .