Frontken Berhad Annual Report 2018

47 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2018 Key Audit Matters (Cont’d) @N QJ_N MN]N[VRWNM ]QN VJ]]N[\ MN\L[RKNM KNUX` ]X KN ]QN TNb J^MR] VJ]]N[\ ]X KN LXVV^WRLJ]NM RW X^[ [NYX[] Goodwill impairment ;NON[ ]X 7X]N ]X ]QN ࠰WJWLRJU \]J]NVNW]\ Key Audit Matter How our audit address the Key Audit Matter =QN 0[X^Y QJ\ PXXM`RUU XO JYY[XaRVJ]NUb ;6 ! VRUURXW LXVY[R\NM `R]QRW ]QN LJ\Q PNWN[J]RWP ^WR]\ ۷,0>۸ /X[ ]QN ,0>\ `QRLQ LXVY[R\NM PXXM`RUU ]QN MN]N[VRWJ]RXW XO [NLX_N[JKUN JVX^W] KNRWP ]QN QRPQN[ XO OJR[ _JU^N UN\\ LX\]\ ]X \NUU JWM _JU^N RW ^\N [NZ^R[N\ S^MPNVNW] XW ]QN part of management in identifying and then valuing the [NUN_JW] ,0>\ The value-in-use models used to assess the risk of impairment are based on assumptions including revenue OX[NLJ\]\ P[X\\ JWM XYN[J]RWP VJ[PRW\ JWM MR\LX^W] [J]N\ JUU XO `QRLQ J[N LX^W][b \YNLR࠰L We focused on this area because of the inherent judgement involved in determining key assumptions such as future \JUN\ P[X`]Q Y[X࠰] VJ[PRW\ MR\LX^W] [J]N\ JWM ]N[VRWJU _JU^N 8^[ Y[XLNM^[N\ RWLU^MNM JVXWP\] X]QN[\# (a) Making enquiries of and challenging the management on ]QN TNb J\\^VY]RXW\ VJMN RWLU^MRWP# R ]QN JLQRN_NVNW] XO ]QN K^\RWN\\ YUJW$ JWM RR \JUN\ P[X`]Q XYN[J]RWP VJ[PRW MR\LX^W] [J]N\ JWM long-term growth rates; (b) Performing sensitivity analysis on key assumptions and agreeing with management’s conclusion to ascertain ]QN Na]NW] XO LQJWPN ]QJ] RWMR_RM^JUUb X[ RW LXVKRWJ]RXW would be required for the goodwill to be impaired; and (c) Assessing the adequacy of disclosure of goodwill in the ࠰WJWLRJU \]J]NVNW]\ Recoverable of trade receivables ;NON[ ]X 7X]N ]X ]QN ࠰WJWLRJU \]J]NVNW]\ Key Audit Matter How our audit address the Key Audit Matter The trade receivables of the Group amounted to JYY[XaRVJ]NUb ;6 ! VRUURXW JWM R] LXW\]R]^]NM ! XO ]QN ]X]JU L^[[NW] J\\N]\ XO ]QN 0[X^Y We focused on this area due to the long outstanding [NLNR_JKUN KJUJWLN\ `QRLQ NaLNNMNM ]QN L[NMR] ]N[V XO " MJb\ P[JW]NM Kb ]QN 0[X^Y =QN ]X]JU UXWP X^]\]JWMRWP KJUJWLN\ `QRLQ NaLNNMNM ]QN L[NMR] ]N[V JVX^W]NM ]X JYY[XaRVJ]NUb ;6 VRUURXW R\ LXW\RMN[NM ]X KN XO J VJSX[ L[NMR] [R\T =QN J\\N\\VNW] XO [NLX_N[JKRUR]b XO ]QN\N long outstanding receivables involved judgement and N\]RVJ]RXW XO ^WLN[]JRW]b Kb 6JWJPNVNW] 8^[ Y[XLNM^[N\ RWLU^MNM JVXWP\] X]QN[\# (a) Testing the adequacy of the Group’s allowance for impairment losses on trade receivables by assessing the Group’s policy and historical data from the Group’s Y[N_RX^\ LXUUNL]RXW NaYN[RNWLN$ (b) Reviewing the Group’s subsequent collection after the ࠰WJWLRJU bNJ[ OX[ VJSX[ [NLNR_JKUN\$ L ;N_RN`RWP ]QN NaYNL]NM L[NMR] UX\\ J\\N\\VNW] Kb LQJUUNWPRWP `QN]QN[ ]QN QR\]X[RL NaYN[RNWLN R\ representative of the current circumstances and of recent losses incurred in the receivables and assessing the reasonableness of forward-looking adjustments; and M *\\N\\RWP ]QN JMNZ^JLb XO MR\LUX\^[N RW ]QN ࠰WJWLRJU \]J]NVNW]\ Independent Auditors’ Report To The Member Of Frontken Corporation Berhad (cont’d)