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B.9
FINANCIAL ASSETS
Financial assets are initially recorded at fair value and
classified in one of the following categories on the basis of
their nature and the purpose for which they were acquired:
(a) financial assets at fair value through profit or loss;
(b) loans and receivables;
(c) available-for-sale financial assets.
Purchases and sales of financial assets are accounted for at
the settlement date.
Financial assets are derecognised when the right to receive
cash flows from the instrument expires and the Group has
substantially transferred all the risks and rewards relating to
the instrument and its control.
(a) Financial assets at fair value through profit or loss
Financial assets classified in this category are represented
by securities held for trading, having been acquired with
the purpose of selling them in the short term. Derivatives
are treated as securities held for trading, unless they
are designated as hedging instruments and are therefore
classified under “Derivatives”.
Financial assets at fair value through profit or loss are
initially recorded at fair value and the related transaction
costs are expensed immediately to the income statement.
Subsequently, financial assets at fair value through profit
or loss are measured at fair value. Assets in this category
are classified as current assets (except for Derivatives
falling due after more than 12 months). Gains and losses
from changes in the fair value of financial assets at
fair value through profit or loss are reported in the
income statement as “Finance income” and “Finance
costs”, in the period in which they arise. This does not
apply to metal derivatives, whose fair value changes are
reported in “Fair value change in metal derivatives”. Any
dividends from financial assets at fair value through profit
or loss are recognised as revenue when the Group’s right
to receive payment is established and are classified in the
income statement under “Share of income from
investments in associates and dividends from other
companies”.
(b) Loans and receivables
Loans and receivables are non-derivative financial
instruments with fixed or determinable payments that
are not quoted in an active market. Loans and receivables
are classified in the statement of financial position as
“Trade and other receivables” and treated as current
assets (Note 5), except for those with contractual due
dates of more than twelve months from the reporting
date, which are classified as non-current (Note 5).
These assets are valued at amortised cost, using the
effective interest rate. The process of assessment to
identify any impairment of trade and other receivables is
described in Note 5.
(c) Available-for-sale financial assets
Available-for-sale assets are non-derivative financial
instruments that are explicitly designated as available
for sale, or that cannot be classified in any of the previous
categories; they are classified as non-current assets,
unless management intends to dispose of them within
twelve months of the end of the reporting period.
All the financial assets in this category are initially
recorded at fair value plus any related transaction costs.
Subsequently, available-for-sale financial assets are
measured at fair value and gains or losses on valuation are
recorded in an equity reserve. “Finance income” and
“Finance costs” are recognised in the income statement
only when the financial asset is effectively disposed of.
The fair value of listed financial instruments is based on the current bid price. If the market for a financial asset is not active (or
it refers to unlisted securities), the Group establishes fair value by using valuation techniques which include: reference to current
transactions at an advanced stage of negotiation, reference to securities with the same characteristics, analyses based on cash
flows, pricing models that use market indicators which are aligned, as far as possible, to the assets being valued.
When performing such valuations, the Group gives preference to market information specifically connected to the nature of the
sector in which the Group operates rather than to internal information.
