GHL System Berhad Annual Report 2018

a n n u a l r e p o r t 2 0 1 8 145 NOT ES TO THE F I NANC I A L STAT EMENTS 3 1 D e c e m b e r 2 0 1 8 C O N T ’ D 35. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (cont’d) 35.1 New MFRSs adopted during the financial year (cont’d) Adoption of the above Standards did not have any material effect on the financial performance or position of the Group and of the Company except for the adoption of MFRS 15 and MFRS 9 described in the following sections. (a) MFRS 9 Financial Instruments MFRS 9 replaces MFRS 139 Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018, encompassing all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting. The Group applied MFRS 9 prospectively, with an initial application date of 1 January 2018. The Group has not restated the comparative information, which continues to be reported under MFRS 139. Differences arising from the adoption of MFRS 9 have been recognised directly in retained earnings and other components of equity. (i) Classification of financial assets and financial liabilities The Group and the Company classify their financial assets into the following measurement categories depending on the business model of the Group and the Company for managing the financial assets and the terms of contractual cash flows of the financial assets: - Those to be measured at amortised cost; and - Those to be measured subsequently at fair value either through other comprehensive income or through profit or loss. The following summarises the key changes: - The Available-For-Sale (AFS), Held-To-Maturity (HTM) and Loans and Receivables (L&R) financial asset categories were removed. - A new financial asset category measured at Amortised Cost (AC) was introduced. This applies to financial assets with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by collecting contractual cash flows. - A new financial asset category measured at Fair Value Through Other Comprehensive Income (FVTOCI) was introduced. This applies to debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. - A new financial asset category for non-traded equity investments measured at FVTOCI was introduced. MFRS 9 largely retains the existing requirements in MFRS 139 for the classification of financial liabilities. However, under MFRS 139 all fair value changes of liabilities designated as FVTPL are recognised in profit or loss, whereas under MFRS 9 these fair value changes are generally presented as follows: - Amount of change in the fair value that is attributable to changes in the credit risk of the liability is presented in Other Comprehensive Income; and - The remaining amount of change in the fair value is presented in profit or loss.