Gschäftsbericht 2018

Galenica financial statements 2018 | 117 Finance Notes to the consolidated financial statements of the Galenica Group 24. Financial instruments 24.1 Categories of financial instruments Accounting principles Galenica classifies its financial assets and financial liabilities at initial recognition as subsequently measured at amortised cost or fair value through profit or loss. Measurement of financial assets and financial liabilities With the exception of trade receivables, financial assets and financial liabilities are initially measured at fair value plus or minus directly attributable transaction costs, if those financial instruments are not subsequently measured at fair value through profit or loss. Trade receivables are initially measured at the transaction price resulting from the revenue trans- action. All purchases and sales of financial instruments are recognised using trade date accounting. Financial assets are generally derecognised when the contractual rights to the cash flows expire. Financial liabilities are derecognised when they have been settled. For subsequent measurement Galenica distinguishes between the following types of financial assets and financial liabil- ities: Financial assets at amortised cost This category includes trade and other receivables as well as loans and other financial assets such as rental deposits. These financial assets are subsequently measured at amortised cost using the effective interest rate method less expected credit losses. Expected credit losses are based on historical credit loss experience, adjusted for forward-look- ing factors specific to the debtors and the economic environment. Changes in expected credit losses due to changes in estimated credit risk are determined at each reporting date and charged to profit or loss. Galenica uses the simplified approach to determine its bad debt allowance for trade receivables using lifetime expected credit losses. Until 31 December 2017 credit losses were determined using an incurred loss model and financial assets at amortised cost were referred to as “loans and receivables”. Uncollectible loans and receivables are only derecognised if a certificate of loss has been issued. Financial assets and financial liabilities at fair value through profit or loss Financial assets and financial liabilities classified as at fair value through profit or loss include derivative financial instru- ments, financial assets acquired for trading purposes and contingent consideration liabilities from business combina- tions. Financial liabilities at amortised costs Financial liabilities mainly comprise trade and other payables as well as financial liabilities and bonds and are measured at amortised cost using the effective interest rate method. Carrying amounts of financial instruments 2018 (IFRS 9 measurement categories) in thousand CHF Financial assets at amortised costs Financial liabilities at amortised costs Total Cash and cash equivalents 104,970 — 104,970 Trade and other receivables 371,648 — 371,648 Financial assets 13,908 — 13,908 Current financial liabilities — 29,674 29,674 Trade and other payables — 290,109 290,109 Non-current financial liabilities — 380,910 380,910 Total 490,526 700,693