Bursa Malaysia • Annual Report 2013
104
Financial Reports
2. Significant accounting policies (cont’d.)
2.3 Standards issued but not yet effective (cont’d.)
Effective for financial periods beginning on or after 1 January 2015
Amendments to MFRS 9
Mandatory Effective Date of MFRS 9 and Transition Disclosures
The Group and the Company will adopt the above pronouncements when they become effective in the respective financial periods.These pronouncements
are not expected to have any effect to the financial statements of the Group and of the Company upon their initial application, except as described
below:
MFRS 9
Financial Instruments
MFRS 9
Financial Instruments
, addresses the classification, measurement and recognition of financial assets and financial liabilities. MFRS 9 was issued
in November 2009 and October 2010. It replaces the parts of MFRS 139 that relate to the classification and measurement of financial instruments.
MFRS 9 requires financial assets to be classified into two measurement categories - those measured at fair value and those measured at amortised
cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments
and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the MFRS 139 requirements. The
main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk
is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch.
The Group and the Company will quantify the effect of adopting this standard when the full standard is issued.
2.4 Summary of significant accounting policies
(a) Subsidiaries and basis of consolidation
(i) Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less accumulated impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in profit or loss.
(ii) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the financial year end. The
financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same financial
year end as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control
ceases.
Notes to the Financial Statements
31 December 2013
