Frontken Berhad Annual Report 2017

56 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2017 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D) 2.2 The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:- MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date MFRS 9 Financial Instruments (IFRS 9 as issued by IASB in July 2014) 1 January 2018 MFRS 15 Revenue from Contracts with Customers 1 January 2018 MFRS 16 Leases 1 January 2019 MFRS 17 Insurance Contracts 1 January 2021 IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018 IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019 Amendments toMFRS2: ClassificationandMeasurement of Share-basedPayment Transactions 1 January 2018 Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018 Amendments to MFRS 9: Prepayment Features with Negative Compensation 1 January 2019 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred Amendments to MFRS 15: Effective Date of MFRS 15 1 January 2018 Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts with Customers’ 1 January 2018 Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures 1 January 2019 Amendments to MFRS 140: Transfers of Investment Property 1 January 2018 Annual Improvements to MFRS Standards 2014 – 2016 Cycles: � Amendments to MFRS 1: Deletion of Short-term Exemptions for First-time Adopters � Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair Value 1 January 2018 Annual Improvements to MFRS Standards 2015 – 2017 Cycles 1 January 2019 The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:- (i) MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces the existing guidance in MFRS 139 and introduces a revised guidance on the classification and measurement of financial instruments, including a single forward-looking ‘expected loss’ impairment model for calculating impairment on financial assets, and a new approach to hedge accounting. Under this MFRS 9, the classification of financial assets is driven by cash flow characteristics and the business model in which a financial asset is held. Based on the assessments undertaken to date, the Group does not expect the above new requirements to affect the classification and measurements of its financial assets and financial liabilities. On the expected credit loss impact, the Group expects an increase in the Group’s allowance for impairment by less than 2% of trade receivables. (ii) MFRS 15 establishes a single comprehensive model for revenue recognition and will supersede the current revenue recognition guidance and other related interpretations when it becomes effective. Under MFRS 15, an entity shall recognise revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the distinct promised goods or services underlying the particular performance obligation is transferred to the customers. The amendments to MFRS 15 further clarify the concept of ‘distinct’ for the purposes of this accounting standard. In addition, extensive disclosures are also required by MFRS 15. The Group anticipates that the application of MFRS 15 in the future may have an impact on the amounts reported and disclosures made in the financial statements. Based on the assessment undertaken to date, there is no material impact on the Group’s and the Company’s financial results upon its initial application. Notes To The Financial Statements (cont’d)