JSC “Uzbekneftegaz” Consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) 14
3. Significant accounting policies (continued) Financial assets (continued) The Group considers a financial asset in default when contractual payments are 90 days past due. However,
in certain cases, the Group may also consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by the Group. A financial asset is written off when there is
no reasonable expectation of recovering the contractual cash flows.
Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans borrowings and payables, or as derivatives financial instruments.
All financial liabilities are recognized initially at fair value and in the case of loans and borrowings, plus directly
attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings.
Subsequent measurement The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near
term. This category includes derivative financial instruments entered into by the Group that are not designated
as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are
also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in profit or loss.
The Group has not designated any financial liabilities upon initial recognition as at fair value through profit or loss.
Trade and other payables Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the EIR.
Loans and borrowings After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost
using the EIR. Gains and losses are recognized in the consolidated statement of profit or loss when the
liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs
that are an integral part of the EIR. The EIR amortization is included in finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least twelve months after the reporting date. Borrowing costs that are directly attributable
to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that
asset. Other borrowing costs are recognized as an expense when incurred.
Financial guarantee contracts Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to
reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in
accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a
liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the expected credit losses allowance calculated under
IFRS 9 and the amount initially recognized liability less cumulative amortization, if any.
