Cash flows are included on the Statement of Cash Flows on a gross basis. The GST component of the cash flows arising from investing and financing activities, which is recoverable from, or payable to, the Inland Revenue Department are classified as part of operating cash flows. c) Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions, other highly liquid investments with maturities of three months or less that are readily convertible to known amounts of cash and with an insignificant risk of changes in value. d) Financial instruments Financial instruments are recognised when the College becomes a party to the contractual provisions of the instrument. Financial instruments are derecognised when the contractual rights to the cash flows from the asset expire, or College transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. The College derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. The College also derecognises financial assets and liabilities when there have been significant changes to the terms and/or the amount of contractual payments to be received/paid. Financial assets and liabilities are offset, and the net amount presented in the Statement of Financial Position when, and only when, the College has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. i. Financial assets Financial assets are classified, at initial recognition, as financial assets at fair value through surplus or deficit, loans and receivables, and held-to-maturity investments or available-for-sale financial assets. All financial assets are recognised initially at fair value. Financial assets include cash and cash equivalents, short-term investments, receivables from non-exchange transactions, receivables from exchange transactions and investments. All financial assets except for those at fair value through surplus or deficit are subject to review for impairment at least at each reporting date. Financial instruments are impaired when there is any objective evidence that a financial asset or group of financial assets is impaired. • Financial assets at fair value through surplus or deficit Financial assets at fair value through surplus or deficit include financial assets held for trading and financial assets designated upon initial recognition at fair value through surplus or deficit. Investments in equities held are included in this category of financial instruments. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments (as defined by PBE IPSAS 29).
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