IMC ANNUALREPORT 2020 - Flipbook - Page 43
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
If a business combination is achieved in stages, the acquisition date
carrying value of the acquirer’s previously held equity interest in the
acquire is remeasured to fair value on the date of acquisition. Any gains
or losses arising from such remeasurement are recognized in profit or
loss.
2.6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, unrestricted balances
held with banks, other short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value. Cash and cash equivalents are
carried at amortized cost.
2.7. FINANCIAL ASSETS AND LIABILITIES
(a) (De) Recognition and initial measurement
Consolidated
financial statements
Notes to the consolidated
financial statements
Company
financial statements
Other information
Independent Auditor’s report
The Group initially recognizes financial assets and liabilities on the trade
date, which is the date on which the Group becomes party to the
contractual provisions of the instrument.
A financial asset or financial liability is measured initially at fair value
plus, for an item not at fair value through profit and loss account
(‘FVTPL’), transaction costs that are directly attributable to its
acquisition or issue.
The Group derecognizes a financial asset when the contractual rights to
the cash flows from the asset expire or it transfers the rights to receive
the contractual cash flows on the financial asset in a transaction in
which substantially all the risks and rewards of ownership of the
financial asset are transferred. A financial liability is derecognized when
contractual obligations no longer exist, are cancelled or expire.
Positions of cryptographic assets like cryptocurrencies and stablecoins,
are recorded as part of financial assets held for trading and results
recorded as part of trading income. For cryptocurrencies, the Group
applies the commodity broker-traders exception and guidance in IAS 2
Inventories and measures cryptocurrencies at fair value less costs to sell,
with changes in fair value recognized in profit or loss. Costs to sell are
considered as immaterial and no allowance is made for such costs. The
Group does apply IAS 2 Inventories for classification of cryptocurrencies
in the balance sheet, however classifies cryptocurrencies under financial
assets considering the relative size of the cryptocurrencies position in
IMC ANNUAL REPORT 2021
relation to the overall balance sheet and in order to facilitate the
insights into the composition of the respective components of the
balance sheet.
Stablecoins and crypto-related derivatives are measured at FVTPL.
(b) C
lassification & Subsequent measurement – financial
assets
After initial recognition, a financial asset is classified as measured at:
amortized cost; fair value through other comprehensive income
(‘FVOCI’) – debt investment; FVOCI – equity investment; or FVTPL.
A financial asset is measured at amortized cost when it meets both of
the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold financial
assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
A debt investment is measured at FVOCI when it meets both of the
following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets; and
• its contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
On initial recognition of an equity investment that is not held for
trading, the Group may irrevocably elect to present subsequent changes
in the investment’s fair value in OCI. This election is made on an
investment-by-investment basis.
The Group has opted for this policy for certain equity investments
including the investment in McKay Brothers LLC and affiliated
companies, the investments in Pick Two LLC, Paradigm Connect
Holdings LLC, Global Futures and Options Holdings LLC and exchange
memberships and quoted CME shares.
All financial assets not classified as measured at amortized cost or
FVOCI as described above are measured at FVTPL. This includes all
trading positions, assets and liabilities, including the derivative financial
assets and liabilities. On initial recognition, the Group may irrevocably
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