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(ii) Classification and measurement
All financial assets and liabilities are 
initially recognised at fair value, with the 
exception of trade receivables without a 
significant financing component, which 
are measured at their transaction price, 
determined in accordance with the Group’s 
accounting policies for revenue. Subsequently, 
measurement depends on the financial assets/
liabilities classification as follows:
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  Financial assets measured at fair value 
through profit or loss (FVPL)
Non-equity financial assets are classified 
as FVPL if they arise from contracts which 
do not give rise to cash flows which are 
solely principal and interest, or otherwise 
where they are held in a business model 
which mainly realises them through sale. 
Such assets are re-measured to fair value 
at the end of each reporting period. Gains 
and losses arising from re-measurement are 
taken to profit or loss, as are transaction 
costs.
Equity investments are classified as FVPL 
unless they are designated as at FVOCI on 
initial recognition (see below). Dividends 
from equity investments, irrespective of 
whether classified as FVPL or FVOCI, are 
recognised in profit or loss as finance 
income.
■
  Financial assets measured at FVOCI
Non-equity financial assets are classified 
as FVOCI where they arise from contracts 
which give rise to contractual cash flows 
which are solely principal and interest 
and which are held in a business model 
which realises some through sale and 
some by holding them to maturity. They 
are recognised initially at fair value plus 
any directly attributable transaction costs, 
or in the case of trade receivables, at the 
transaction price.
At the end of each reporting period they 
are re-measured to fair value, with the 
cumulative gain or loss compared to their 
amortised cost (AC) being recognised 
as fair value reserve through other 
comprehensive income, except for the 
recognition in profit or loss of expected 
credit losses, interest income (calculated 
using the effective interest method) and 
foreign exchange gains and losses.
When these assets are derecognised, the 
cumulative gain or loss is reclassified from 
equity to profit or loss.
Equity investments not held for trading 
purposes are designated as at FVOCI 
where they are considered strategic to the 
Group. Such designation is made on an 
instrument-by-instrument basis, but may 
only be made if the investment meets 
the definition of equity from the issuer’s 
perspective. Amounts accumulated in 
the fair value reserve in respect of these 
investments are transferred directly to 
retained earnings on the disposal of the 
investment. These investments are not 
subject to impairment.

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Huawei Investment & Holding Co., Ltd.
■
  Financial assets measured at amortised cost
Financial assets are held at amortised cost 
when they arise from contracts which give 
rise to contractual cash flows which are 
solely principal and interest and are held in 
a business model which mainly holds the 
assets to collect contractual cash flows.
Financial assets measured at amortised 
cost when they are not purchased or 
originated credit-impaired are measured at 
amortised cost using the effective interest 
method. For those purchased or originated 
credit-impaired, the Group applies the 
credit-adjusted effective interest rate since 
initial recognition. These assets are also 
subject to impairment losses (see note 3(j)). 
Interest income is calculated based on the 
gross carrying amount of the financial asset 
unless the financial asset is credit impaired, 
in which case interest income is calculated 
on the amortised cost (i.e. gross carrying 
amount less loss allowance). Interest 
income is included in finance income.
■
  Financial liabilities at amortised cost
Financial liabilities, except those designated 
as at FVPL, are stated at amortised cost 
using the effective interest method. Interest 
is included in finance expenses unless 
capitalised into an asset (see note 3(s)).
■
  Financial liabilities designated as at FVPL
The Group has irrevocably designated 
certain financial liabilities as at FVPL 
on initial recognition because they 
are managed and their performance 
is evaluated on a fair value basis and 
information is provided internally on that 
basis to the Group’s key management 
personnel.
(f) Investment  property
Investment properties are land and buildings 
which are owned or held under a leasehold 
interest (see note 3(i)) to earn rental income 
and/or for capital appreciation.
Investment properties are stated at cost less 
accumulated depreciation (see note 3(g)
(ii)) and impairment losses (see note 3(j)). 
Rental income from investment properties is 
accounted for as described in note 3(p)(ii).
(g) Other property, plant and 
equipment