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NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 December 2013
2.
Summary of significant accounting policies (cont’d)
2.9
Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as
to obtain benefits from its activities. In the Company’s separate financial statements, investments in subsidiaries
are accounted for at cost less any impairment losses.
2.10 Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of
the financial instrument. The Group determines the classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets
not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans
and receivables. Subsequent to initial recognition, such assets are measured at amortised cost using the effective
interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables
are derecognised or impaired, as well as through the amortisation process.
The Group classifies all its financial assets as loans and receivables.
Derecognition
A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration
received and any cumulative gain or loss that has been recognised in other comprehensive income is recognised
in profit or loss.
2.11 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and on hand, demand deposits and short-term, highly liquid
investments readily convertible to known amounts of cash and subject to an insignificant risk of change in value.
Cash and cash equivalents carried in the balance sheet are classified and accounted for as loans and receivables
under FRS 39. The accounting policy for this category of financial assets is stated in Note 2.10.
2.12 Trade and other receivables
Trade and other receivables, including amounts receivable from director-related company, are classified and
accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets
is stated in Note 2.10.
An allowance is made for uncollectible amounts when there is objective evidence that the Group will not be able to
collect the debt. Bad debts are written off when identified. Further details on the accounting policy for impairment
of financial assets are stated in Note 2.13 below.
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Overseas Education Limited AR 2013
INVESTING IN EDUCATION