PRG Holdings Berhad Annual Report 2019

ANNUAL REPORT 2019 109 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 cont’d 5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued) 5.1 New MFRSs adopted during the financial year (continued) MFRS 16 Leases (continued) In applying MFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard: (a) Applying a single discount rate to a portfolio of leases with reasonably similar characteristics; (b) Relying on previous assessments on whether leases are onerous as an alternative to performing an impairment review - there were no onerous contracts as at 1 January 2019; (c) Accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 and do not contain a purchase option as short-term leases; (d) Excluding initial direct costs for the measurement of the right-of-use asset at the date of initial application; and (e) Using hindsight in determining the lease term where the contract contains options to extend or terminate the lease. On transition to MFRS 16, the Group recognised right‑of‑use assets and lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below: As at 31 December 2018 Impact As at 1 January 2019 Group Note RM’000 RM’000 RM’000 Property, plant and equipment 43,789 (7,793) 35,996 Right-of-use assets (a) - 13,603 13,603 Deferred tax assets 4,964 17 4,981 Borrowings 46,593 (839) 45,754 Lease liabilities (b) - 7,047 7,047 Trade and other payables 153,724 41 153,765 Retained earnings 47,924 (229) 47,695 Non-controlling interests 40,199 (193) 40,006 (a) The associated right-of-use assets for property leases were measured on a retrospective basis as if the new rules had always been applied. Other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the financial statements as at 31 December 2018.