Notes to Consolidated Financial Statements continued Thousands of Georgian Lari 3. Summary of Significant Accounting Policies continued Adoption of new or revised standards and interpretations continued IFRS 9 had no impact on the Group’s financial liabilities. The application of these policies resulted in reclassification set out in the table above and explained below: a) Loans to customers As of 1 January 2018, the Group assessed its business model for loans to customers which are mostly held to collect the contractual cash flows. The Group has identified a certain group of loans issued by one of the Group entities for which the business model is other than held to collect and held to collect and sell. This loan portfolio which was previously classified at amortised cost was reclassified to FVTPL from the date of initial application. The change in measurement basis did not result in material re-measurement for the Group. The reminder of the Group’s loans to customers is held to collect contractual cash flows, meets SPPI criteria and therefore is measured at amortised cost. b) Securities Investment securities other than equity instruments and those securities held for trading As at 1 January 2018 the Group has assessed its liquidity portfolio which had previously been classified as AFS debt instruments. The Group concluded that these instruments are managed within a business model of collecting contractual cash flows and selling the financial assets and meet SPPI criteria. Accordingly, the Group has classified these investments as debt instruments measured at FVOCI. Equity instruments The Group has elected to irrevocably designate investment securities of GEL 1,354 in the portfolio of non-trading equity securities at FVOCI as permitted under IFRS 9. These securities were previously classified as available for sale. The changes in fair value of such securities are no longer to be reclassified to profit or loss when they are disposed of. Securities held for trading The Group holds an investment of GEL 3,191 in a portfolio of investment securities which are held for trading. These securities were measured at FVTPL as they were managed on a fair value basis. As part of the transition to IFRS 9, these securities are part of an “other” business model and so are required to be classified as FVTPL. 202 Annual Report 2018Bank of Georgia Group PLC