amounts due. Financial liabilities The Group and the Company classify its financial liabilities at AC or at FVTPL. Offsetting financial instruments Financial assets and liabilities are offsetted and the net amounts are presented in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy. Financial guarantee contracts Financial guarantee contracts are contracts that require the Group or the Company to make specified payments to reimburse the holder for a loss it incursbecause a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured at fair value and subsequently at the higher of; (i) The amount determined in accordance with the ECL model; and (ii) The amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the principles of MFRS 15. The fair value of financial guarantees is determined as the present value of the difference in net cash flows between the contractual payments under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations. Where guarantees in relation to loans or other payables of associates are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment. 45 FINANCIAL INSTRUMENTS (CONTINUED) NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 307 45 FINANCIAL INSTRUMENTS (CONTINUED) (a) Categories of