SCC Holdings Berhad Annual Report 2018

SCC Holdings Berhad | Annual Report 2018 .43 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2018 (CONT’D) 2. Basis of Preparation (cont’d) (a) Statement of compliance (cont’d) Adoption of new and amended standards (cont’d) (ii) MFRS 15 Revenue from Contracts with Customers (cont’d) (a) Changes to accounting policies (i) Customer loyalty programme The Group operates a loyalty programme where customers accumulate points for purchases made which entitle to redeem gifts. The consideration received from sale of goods was allocated to the loyalty programme using the fair value of points issued, and recognition of deferred revenue in relation to points issued but not yet redeemed or expired. Under MFRS 15, the loyalty points give rise to a separate performance obligation because they provide material right to the customer. The transaction price is allocated to the products and the points awarded to customers on a relative stand-alone selling price basis. A contract liability is recognised at the time of the sale. Revenue is recognised when the points are redeemed or when they expire 12 months after the initial sale. A contract liability is recognised until the points are redeemed or expire. (ii) Accounting for consideration payable to customer The Group offers promotions to its customers, and recognised these as promotion costs in profit or loss as occurred. Under MFRS 15, consideration payable to a customer are accounted for as a reduction of the transaction price and therefore, of revenue. Impact arising from adoption of MFRS 9 on the Group’s financial statements are as follows: As at 1.1.2018 As at as previously MFRS 9 1.1.2018 stated Adjustment as restated RM’000 RM’000 RM’000 Group Trade receivables 15,402 (43) 15,359 Retained earnings (15,979) 43 (15,936)