the Company measure a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in the statement of profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 304 Accounting Policy (continued) Financial instruments comprise financial assets and financial liabilities as below: (continued) Financial assets (continued) (c) Measurement (continued) (ii) Subsequent measurement • Debt instruments Subsequent measurement of debt instruments depends on the Group’s and the Company’s businessmodel for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group and the Company classify its debt instruments: - AC: Interest income from financial assets at AC is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in the statement of profit or loss. Impairment losses are presented as a separate line item in the statement of profit or loss. - FVOCI: Movements in the carrying amount of debt instruments classified under FVOCI are taken through OCI. Upon derecognition of the assets, the cumulative gain or loss previously recognised in OCI is reclassified to the statement of profit or loss. The interest income from these financial assets is included in the finance income using the effective interest rate method. The foreign exchange gains and losses and impairment expenses are presented as a separate line item in the statement of profit or loss. - FVTPL: Financial assets that do not meet the criteria for AC or FVOCI are measured at FVTPL. A gain or loss on debt instruments which