Annual Report 2023

109 ANNUAL REPORT 2023 2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED) 2.10 Financial assets (i) Classification Financial assets that meet the following conditions are subsequently measured at amortised cost: ‧ the financial asset is held within a business model whose objective is to collect contractual cash flows; and ‧ the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets that meet the following conditions are subsequently measured at FVTOCI: ‧ the financial asset is held within a business model whose objective is achieved by both selling and collecting contractual cash flows; and ‧ the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets are subsequently measured at FVTPL, except that at initial recognition of a financial asset the Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if that equity investment is neither held for trading nor contingent consideration recognised by an acquirer in a business combination to which HKFRS 3 “Business Combinations” (“HKFRS 3”) applies. A financial asset is held for trading if: ‧ it has been acquired principally for the purpose of selling in the near term; or ‧ on initial recognition it is a part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or ‧ it is a derivative that is not designated and effective as a hedging instrument. In addition, the Group may irrevocably designate a financial asset that are required to be measured at the amortised cost or FVTOCI as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.