Financial instruments
1.Non-derivative financial assets
The Group initially recognizes receivables and deposits on the date that they are originated. All other financial assets are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Group has a legal right to offset the amount and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets:
Receivables, deposits and cash and cash equivalents
Receivables and deposits are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, receivables are measured at amortized cost using the effective interest method, less any impairment losses.
Receivables consist of trade and other receivables.
Cash and cash equivalents comprise cash balances and deposits with original maturities of three months or less.
Financial investments
The Group has entered into financial investments, which consist of investments in government, corporate and government sponsored enterprises debentures. The Group's investments policy limits the credit rating and the amount that the Group may invest in any one type of investment or issuer and, thereby the credit risk is reduced. Financial investments are recognized initially at fair value. Subsequent to initial recognition, financial investments are measured at fair value, and changes therein are recognized immediately in the statement of operations, as financing items.
2.Non-derivative financial liabilities
The Group has the following non-derivative financial liabilities: trade payables and other payables. Trade payables and all other financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
Financial liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
3.Derivative financial instruments
The Group has entered into currency derivative contracts to moderate its global currency risk on the basis of planned transactions. These contracts generally cover a period of less than one year. The Group’s hedging activities currently do not meet the criteria for hedge accounting.
Derivative financial instruments are recognized initially at fair value; attributable transaction costs are recognized in the statement of operations as incurred. Subsequent to initial recognition, derivative financial instruments are measured at fair value, and changes therein are recognized immediately in the statement of operations, as either operating or financing items depending on the nature of the item being economically hedged.
4.Share capital
All shares are classified as equity.
Incremental costs directly attributable to the issuance of shares and options are recognized as a deduction from equity, net of any tax effects.