FINANCIAL INFORMATION THE GROUP
PROVISIONS
A provision is recognised when the Group has a legal or constructive obligation arising from previous events and it is probable that an outgoing payment will be required to settle the obligation and the amount can be reliably measured . In cases where the Company expects that an obligation for which a provision has been recognised will be paid by an outside party , for instance under the terms of an insurance contract , the provision is accounted for as a separate asset , but only when it is practically certain that the payment will be received . If the obligation for which a provision has been made is due to be settled after more than twelve months , the future payment should be discounted to present value using a discount rate which reflects short-term market expectations , taking account of transaction-specific risks .
FINANCIAL INSTRUMENTS
All purchases and sales of financial assets are recognised at the transaction date , which is the date on which the Group undertakes to purchase the asset . Such purchases and sales normally require delivery within the period defined by regulations or generally accepted practice in the market . Trade receivables are recognised in the balance sheet when an invoice has been sent . A financial liability is recognised when the counterparty has performed and there is a contractual duty to pay , even if no invoice has been received . Trade payables are recognised when an invoice has been received . A financial asset is removed from the balance sheet when the rights inherent in the agreement are realised or expire or if the Company loses control over them . The same applies to a portion of a financial asset . A financial liability is removed from the balance sheet when the obligation in the agreement is fulfilled or otherwise ceases to apply . The same applies to part of a financial liability . Information on financial position and results is provided in Note 17 Financial instruments and financial risk management .
1 . FINANCIAL ASSETS A financial asset is initially classified as one of the following :
Financial assets carried at fair value trough profit or loss Loans and accounts receivables carried at amortised cost Financial assets held to maturity carried at amortised cost Financial assets available for sale carried at fair value through comprehensive income
New Wave Group has financial assets carried at fair value through profit or loss and loans and accounts receivables . There are no financial assets held to maturity or financial assets available for sale .
FINANCIAL ASSETS CARRIED AT FAIR VALUE THROUGH PROFIT OR LOSS New Wave Group uses derivatives , such as currency futures , to manage financial risks . The derivatives are carried at fair value through profit / loss for the year as long as hedge accounting is not applied . They are recognized in other comprehensive income if hedge accounting is applied . If the derivatives have a positive value they are accounted for as a derivative in the balance sheet .
LOAN AND TRADE RECEIVABLES Loan receivables are non-derivative financial assets with specified or specifiable payments that are not listed on an active market . These are initially stated at fair value and subsequently at amortised cost .
Trade receivables are assessed individually and recognised at the amounts at which they are expected to be received . The expected maturity of a trade receivable is short , and the value is therefore recognised at the nominal amount without discounting . A provision is made for doubtful receivables from one time to another if there is objective evidence that the full value of the asset will not be received . Losses attributable to doubtful receivables are recognised in the income statement under external expenses . Information on impairment losses for the year is provided in Note 17 , Financial instruments and financial income .
If a loan or trade receivable needs to be written down , the impairment is calculated as the difference between the asset ’ s carrying amount and the present value of estimated future cash flows . Interest income relating to loan receivables and trade receivables is accounted for as financial income .
LIQUID ASSETS Liquid assets comprise liquid bank deposits and available cash assets .
2 . FINANIAL LIABILITIES A financial liability is initially classified as :
Financial liabilities carried at fair value through profit / loss for the year Financial liabilities carried at amortised cost
FINANCIAL LIABILITIES CARRIED AT FAIR VALUE THROUGH PROFIT / LOSS FOR THE YEAR New Wave Group uses derivatives , such as currency futures , to manage financial risks . The derivatives are carried at fair value through profit / loss for the year as long as hedge accounting is not applied . They are recognized in other comprehensive income if hedge accounting is applied . If the derivatives have a negative value they are accounted for as a liability in the balance sheet
FINANCIAL LIABILITIES CARRIED AT AMORTISED COST These liabilities are initially carried at fair value less transaction costs . In subsequent periods these liabilities are stated at amortised cost by applying the effective interest method .
Loan liabilities comprise liabilities to credit institutions . These are stated at cost in the balance sheet at the settlement date plus accrued interest . Trade payables have a short expected maturity and are stated at their nominal value and are not discounted . A description of risks is provided in Note 17 , Financial instruments and financial risk management .
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