securities where the contractual cash flows are solely principal and interest and the objective of the Group’s and of the Company’s business model is achieved both by collecting cash flows and selling financial assets. (iii) Financial assets at FVTPL: • Debt instruments that do not qualify for measurement at either AC or FVOCI; • Equity instruments that are held for trading; and • Equity instruments for which the Group and the Company have not elected to recognise fair value gains and losses through OCI. The Group and the Company reclassify debt instruments when and only when its business model for managing those assets changes. (b) Recognition and derecognition Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group and the Companycommit to purchase or sell the assets. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group and the Company have transferred substantially all the risks and rewards of ownership. (c) Measurement (i) Initial recognition On initial recognition, the Group and 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