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(ii) Non-derivative financial liabilities
The Group initially recognises debt securities issued on the date that they are originated. All other financial liabilities
(including liabilities designated at fair value through the statement of total return) are recognised initially on the
trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.
Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset
and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial
liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Other financial liabilities comprise borrowings and trade and other payables.
(iii) Derivative financial instruments and hedging activities
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures arising
from operating, financing and investing activities. Derivative financial instruments are not used for trading purposes.
However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments. The Group
does not adopt hedge accounting for its derivative financial instruments as at 30 June 2017.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the statement of
total return as incurred.
Subsequent to initial recognition, derivatives are measured at fair value. All changes in fair value is recognised
immediately in the statement of total return. However, if derivatives qualify for hedge accounting, subsequent to
initial recognition, changes in fair value therein are accounted for as described below.
Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to
a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could
affect total return, the effective portion of changes in the fair value of the derivative is recognised and presented
in the hedging reserve in unitholders’ funds. The amount recognised in unitholders’ funds is removed and included
in the statement of total return in the same period as the hedged cash flows affect total return under the same line
item in the statement of total return as the hedged item. Any ineffective portion of changes in the fair value of the
derivative is recognised immediately in the statement of total return.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or
exercised, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in
unitholders’ funds remains there until the forecast transaction occurs. When the hedged item is a non-financial
asset, the amount recognised in unitholders’ funds is transferred to the carrying amount of the asset when it is
recognised. In other cases, the amount recognised in unitholders’ funds is transferred to the statement of total return
in the same period that the hedged item affects total return.
Fair value hedges
Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the
statement of total return. The hedged item is also stated at fair value in respect of the risk being hedged; the gain or
loss attributable to the hedged risk is recognised in the statement of total return with an adjustment to the carrying
amount of the hedged item.
3.7 Unitholders’ funds
Unitholders’ funds represent the residual interest in the Group’s net assets upon termination and are classified as
equity. Expenses incurred in the issuance and placement of units (if any) in the Group are deducted directly against
unitholders’ funds.