INVESTMENTS IN FINANCIAL INSTRUMENTS

Investments: Investments are assets held for the accretion of wealth through distribution, for capital appreciation, or for other benefits, incidental to the entitys operations. Examples of investments: T-FEBAS-PJ: 1. 2. 3. 4. Trading securities Investment in fund Investment in equity securities Investment in bonds 5. 6. 7. 8. Investment in associate Investment in subsidiary Investment property Investment in joint venture

Financial Instruments: Financial Instruments are contracts that give rise to a financial asset of one entity and a financial liability or an equity instrument of another entity. A financial asset is any asset that is: a. Cash b. A contractual right to receive cash or another financial asset from another entity c. A contractual right to exchange financial instruments with another entity under conditions that are potentially favorable A financial liability is any liability that is a contractual obligation to: a. Deliver cash or other financial asset to another entity b. Exchange financial instruments with another entity under conditions that are potentially unfavorable An equity instrument is any contract that evidences a residual interest in the assets of another entity after deducting all of its liabilities. Therefore, INVESTMENTS IN FINANCIAL INSTRUMENTS are financial assets held for the accretion of wealth through distribution, for capital appreciation, or for other benefits, incidental to the entitys operations, giving rise to a financial liability or equity instrument of another entity. Types of investments in financial instruments: 1. Investment in Equity Securities 2. Investment in Debt Securities 3. Investment in Hybrid Securities 4. Derivatives

Investments in Equity Securities: 1. EQUITY INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS INVESTMENT IN EQUITY SECURITIES: HELD FOR TRADING Nature: A cquired principally for purpose of reselling or repurchasing in the near term I nitial recognition, is part of a portfolio, with evidence of recent actual pattern of profit taking D erivative, except one that is a financial guarantee contract or a designated, effective hedging instrument

Measurement: Transaction Price or FVTPL Valuation: Presentation: Fair Value (recognize holding gain or loss) Carrying Amount: Current Assets in Statement of Financial Position Changes in Fair Value: Profit of Loss Disclosures: Individual Securities with corresponding carrying amount and market value. Liens, pledges, collaterals 2. INVESTMENT IN EQUITY SECURITIES: NOT HELD FOR TRADING Classification Nature Measurement Valuation Presentation: Carrying Amount Changes in FV Cumulative Holding Gain / Loss Disclosures Equity investments at FVTPL Equity Investments at FVTOCI asset representing a residual interest in the assets of another entity after deducting all of its liabilities Transaction Price Transaction Price plus directly attributable transaction costs Fair Value (recognize holding gain or loss) Current Asset Profit of Loss ---Non-current Asset Other Comprehensive Income Statement of Changes in Equity

Individual Securities with corresponding carrying amount and market value. Liens, pledges, collaterals

3. INVESTMENT IN ASSOCIATE (ORDINARY SHARES) Nature: a share investment that gives the investor significant influence over the financial and operating policies of the investee (usually > 20%, <50% of voting shares)

Measurement: a. Equity Method: Transaction Price plus directly attributable transaction costs Valuation: Presentation: Disclosures: In the Body of FSs a) The investor's share of the profit or loss of equity method investments, and the carrying amount of those investments, must be separately disclosed. [IAS 28.38] b) The investor's share of any discontinuing operations of such associates is also separately disclosed. c) The investor's share of changes recognised directly in the associate's other comprehensive income are also recognised in other comprehensive income by the investor, with disclosure in the statement of changes in equity In the Notes a) fair value of investments in associates for which there are published price quotations Carrying amount as affected by associates transactions that affect the shareholders equity (unless impaired) a non-current asset in the Statement of Financial Position

b) summarised financial information of associates, including the aggregated amounts of assets, liabilities, revenues, and profit or loss c) explanations when investments of less than 20% are accounted for by the equity method or when investments of more than 20% are not accounted for by the equity method d) use of a reporting date of the financial statements of an associate that is different from that of the investor e) nature and extent of any significant restrictions on the ability of associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances f) unrecognised share of losses of an associate, both for the period and cumulatively, if an investor has discontinued recognition of its share of losses of an associate g) explanation of any associate is not accounted for using the equity method h) summarised financial information of associates, either individually or in groups, that are not accounted for using the equity method, including the amounts of total assets, total liabilities, revenues, and profit or loss 4. Investment in Subsidiary Nature: a share investment that gives the investor control over the investee (usually, more than 50% of voting shares Measurement: Transaction Price Valuation: Separate Financial Statements: carrying amount as affected by subsidiarys transactions that affect the shareholders equity (unless impaired) Combined Financial Statements: no separate valuation [Consolidation Method] Presentation: Separate Statement of Financial Position: Long-term Investment Combined Statement of Financial Position: not presented [Consolidation Method] Disclosure: Consolidation Method 5. Investment in Joint Venture Nature: Jointly controlled Classification operations Nature Measurement Valuation Jointly controlled assets Jointly controlled entities Proportionate Equity method consolidation method Transaction Price Transaction Price

Transaction Price Carrying amount as affected by

Transaction Price

Debt Securities (e.g. Investment in Bonds) Classification Nature Trading Securities Financial Assets at Amortized Cost Debt securities may be called debentures, bonds, deposits, notes or commercial paper, entitling the holder to principal and interest payments, together with other contractual rights under the terms of the issue Fair Value plus directly attributable transaction costs Fair Value only (FVTPL) Amortized cost Fair Value (recognize holding gain Carrying Value or loss) Current Asset Non-current Asset

Measurement: Initial Measurement: Subsequent Valuation Presentation Disclosure Hybrid Securities Derivatives