Financial assets and financial liabilities are recognised in the balance sheet when the company becomes a
party to the contractual provisions of the instrument.
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial
recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the
effective interest rate method. A provision is established when there is objective evidence that the company will
not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank
and bank overdrafts.
Financial liabilities and equity instruments issued by the company are classified in accordance with the
substance of the contractual arrangements entered into and the definitions of a financial liability and an equity
instrument. An equity instrument is any contract that evidences a residual interest in the assets of the company
after deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue costs.