Minerva Equity Limited - 31 March 2019 Final 19.08.2019 - Flipbook - Page 37
Minerva Equity Limited (formerly DMWSL 881 Limited)
Notes to the financial statements
for the period ended 31 March 2019 (continued)
3 Summary of significant accounting policies (continued)
Financial instruments (continued)
Financial liabilities (continued)
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some
or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period to which it relates.
Trade payables 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 payment is
due within one year or less. If not, they are presented as non-current liabilities. Trade payables are
recognised initially at transaction price and subsequently measured at amortised cost using the
effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic
financial instruments.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and
as subsequently remeasured at their fair value. Changes in the fair value of derivatives are
recognised in the profit and loss account in finance costs or finance income as appropriate, unless
they are included in a hedging arrangement.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual
obligation is discharged, cancelled or expires.
Offsetting
Financial assets and liabilities are offset, and the net amounts presented in the financial statements
when there is an enforceable right to set off the recognised amounts and there is an intention to
settle on a net basis or to realise the asset and settle to liability simultaneously.
Joint ventures
Jointly controlled operations
Each venture uses its own property, plant and equipment and carries its own inventories. It also
incurs its own expenses and liabilities and raises its own finance, which represent its own
obligations.
The joint ventures are proportionally consolidated into the group financial statements. That is, the
balances that are recorded are the share of the assets that the joint venture controls and the share of
the liabilities that the joint venture incurs. The profit recognised from the joint venture activities
reflects the Group’s share of the net income that the joint venture earns from the sale of goods or
provision of services by the joint venture.
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