NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2025 3 MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D) 3.6 Financial instruments (cont’d) (ii) Classification and subsequent measurement (cont’d) Financial assets: Business model assessment (cont’d) The business models of the Group are as follows: Held to collect The Group holds financial assets which arise from its property development business, hotel operations and investment properties. The objective of the business model for these financial instruments is to collect the amounts due from the Group’s receivables and to earn contractual interest income on the amounts collected. Other business models This includes mainly equity investments in real estate and financial services industries. These financial assets are managed and their performance is evaluated, on a fair value basis. Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets. Non-derivative financial assets: Assessment of whether contractual cash flows are solely payments of principal and interest In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers: • contingent events that would change the amount or timing of cash flows; • terms that may adjust the contractual coupon rate, including variable rate features; • prepayment and extension features; and • terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features). A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition. ANNUAL REPORT 2025 | 133
RkJQdWJsaXNoZXIy ODIwNTc=