55. Financial instruments

Financial assets held by the Group in accordance with IFRS 9 Financial Instruments are classified into the following classes of financial instruments:

• financial assets measured at amortised cost;
• financial assets measured at a fair value through profit or loss.

As at the balance sheet date, the Group had no financial assets measured at a fair value through other comprehensive income.

Financial assets in accordance with IFRS 9 Financial Instruments are classified upon initial recognition based on the cash flow characteristics (SPPI test) and the business model underlying the management of a given financial asset.

The Group measures equity instruments at a fair value through profit or loss in line with IFRS 9 Financial Instruments.

TAURON Group divides the financial liabilities into the following classes:

• financial liabilities measured at a fair value through profit or loss,
• other financial liabilities, measured at amortised cost at each subsequent balance sheet date.

The Group makes judgements regarding classification of financial instruments.

As at each balance sheet date, the Group measures the fair value of assets and liabilities classified as assets and liabilities measured at a fair value and discloses the fair value of other financial instruments. The methodology fair value measurement is presented below.

The Group recognises an impairment loss upon initial recognition of a financial asset and then remeasures the impairment loss amount as at each reporting day. The Group recognises the allowance for expected credit losses on financial assets measured at amortised cost including mostly receivables from customers and loans granted. The measurement methodology is presented in Notes 36 and 56.1.4. hereto.