Sasbadi Annual Report 2020

SASBADI HOLDINGS BERHAD 66 FINANCIAL STATEMENTS (continued) 1. Basis of preparation (continued) (d) Use of estimates and judgements (continued) There are no significant areas of estimation uncertainty and critical judgments in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes: x Note 5 - measurement of the recoverable amounts of cash-generating units x Note 8 - deferred tax assets/(liabilities) x Note 9 - extension options and incremental borrowing rate in relation to leases x Note 26.4 - measurement of expected credit loss (“ECL”) 2. Significant accounting policies The accounting policies set out below have been applied consistently to the periods presented in these financial statements, and have been applied consistently by the Group entities, unless otherwise stated. Arising from the adoption of MFRS 16, Leases , there are changes to the accounting policies applied to lease contracts entered into by the Group entities as compared to those applied in previous financial statements. The impacts arising from the changes are disclosed in Note 30. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return. Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.