Page 122 - TYCONS - ANNUAL REPORT 2022

Tycoons Worldwide Group (Thailand) Plc.

fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance
costs in profit or loss.

Derecognition of financial instruments

A financial asset is primarily derecognised when the rights to receive cash flows from the
asset have expired or have been transferred and either the Group has transferred

substantially all the risks and rewards of the asset, or the Group has transferred control of
the asset.

A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the

same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition

of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in profit or loss.

Impairment of financial assets

For trade receivables, the Group applies a simplified approach in calculating ECLs.

Therefore, the Group does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date.

ECLs are calculated based on its historical credit loss experience and adjusted for forward-
looking factors specific to the debtors and the economic environment.

A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.

4.14 Derivatives

The Group uses forward currency contracts to hedge its foreign currency risks.

Derivatives are initially recognised at fair value on the date on which a derivative contract

is entered into and are subsequently remeasured at fair value. The subsequent changes
are recognised in profit or loss. Derivatives are carried as financial assets when the fair
value is positive and as financial liabilities when the fair value is negative.

Derivatives are presented as non-current assets or non-current liabilities if the remaining
maturity of the instrument is more than 12 months and it is not due to be realised or settled
within 12 months. Other derivatives are presented as current assets or current liabilities.

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