Notes to the group financial statements l Note 2.5

2.5

Finance income and finance costs
 

Finance income

Finance income comprises interest income on funds invested, changes in the fair value of financial assets at fair value through profit or loss, net foreign exchange gains and any gains on hedging instruments that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs

Finance costs comprise interest expenses on borrowings, unwinding of the discount on provisions, fair value movements, net foreign exchange losses and any losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method, unless the borrowing costs are directly attributable to the acquisition, construction or production or qualifying assets, in which case the directly attributable borrowing costs are capitalised.
 
   2017 
Rm  		    2016 
Rm 		   
Interest income on loans and receivables  2 109     2 462    
Interest income on bank deposits  1 379     1 962    
Finance income  3 488     4 424    
Interest expense on financial liabilities measured at amortised cost1  (8 400)     (9 020)   
Net foreign exchange losses  (4 355)    (5 899)   
Finance costs  (12 755)    (14 919)   
Net finance costs recognised in profit or loss  (9 267)    (10 495)   
1 R1,0 billion (2016: R1,0 billion) relates to the discount unwind on the MTN Nigeria regulatory fine liability.

Notes to the group financial statements l Note 2.5