NEW OROPERU RESOURCES INC.  Notes to Consolidated Financial Statements (Expressed in US dollars)  Years ended December 31, 2012 and 2011  3. SIGNIFICANT ACCOUNTING POLICIES  (Continued)  h)  Share-based Payments i)  Financial Instruments  (i)  Financial assets  Available-for-sale financial assets  Loans and receivables  Financial assets at fair value through profit or loss  Held-to-maturity  The Company classifies its financial assets in the following categories: held -to-maturity, fair  value through profit or loss, loans and receivables, and  available-for-sale (“AFS”). The  classification depends on the purpose for which the financial assets were acquired.  Management determines the classification of financial assets at recognition.  Held-to-maturity financial assets are reco gnized on a trade-date basis and are initially  measured at fair value using the effective interest rate method. The Company has no assets  classified as held-to-maturity.  Financial assets at fair val ue through profit or loss are initially recognized at fair value with  changes in fair value recorded through income. Cash  is included in this category of financial  assets. Loans and receivables are non -derivative financial assets with fixed or determinable payments  that are not quoted in an active market. They are classified as current assets or non -current  assets based on their maturity date. Loans and receivables are carri ed at amortized cost using  the effective interest rate method, less any impairment.  AFS financial assets are non -derivatives that are either designated as AFS or not classified in  any of the other financial asset cat egories. Changes in the fair value of AFS financial assets  are recognized as other comprehensive income and classified as a component of equity.  The  Company has no assets classified as AFS. 14  The Company has a stock option plan that is describ ed in Note 6(b). Share-based payments to employees are  measured at the fair value of the instruments issued and amortized over the vesting periods using the graded  vesting method. Share-based payments to non-employees are measured at the fair value of the  goods or services  received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services  cannot be reliably measured, and are recorded at the date the goods or services are received. The amount  recognized as an expense is adjusted to reflect the number of awards expected to vest. The offset to the recorded  cost is to share-based payments reserve. Consideration received on the exercise of stock options is recorded as  share capital and the related share -based payments reserve is transferred to share capital. 