Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary
course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised
cost using the effective interest method, less provision for impairment. A provision for the impairment of trade
debtors is established when there is objective evidence that the company will not be able to collect all
amounts due according to the original terms of the receivables.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if the company does not have
an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least
twelve months after the reporting date. If there is an unconditional right to defer settlement for at least
twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost
using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing
borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of
transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss
account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest
payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer
settlement of the liability for at least twelve months after the reporting date.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash
or other resources received or receivable, net of the direct costs of issuing the equity instruments. If
payment is deferred and the time value of money is material, the initial measurement is on a present
value basis.