Tropicana Corporation Berhad Annual Report 2019

Notes to the Financial Statements For the financial year ended 31 December 2019 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.) 2.2 Changes in accounting policies arising from adoption of new MFRSs and Amendments to MFRSs (cont’d.) MFRS 16 Leases MFRS 16 supersedes MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease, IC Interpretation 115 Operating Leases-Incentives and IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the statement of financial position. Lessor accounting under MFRS 16 is substantially unchanged from MFRS 117. Lessors will continue to classify leases as either operating or finance leases using similar principles as in MFRS 117. Therefore, MFRS 16 did not have an impact for leases where the Group or the Company is the lessor. The Group and the Company adopted MFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard recognised at the date of initial application. The Group and the Company elected to use the transition practical expedient not to reassess whether a contract is, or contains a lease at 1 January 2019. Instead, the Group and the Company applied the standard only to contracts that were previously identified as leases applying MFRS 117 and IC Interpretation 4 at the date of initial application. The effects of adoption of MFRS 16 as at 1 January 2019, (decrease)/increase, is as follows: Group Company RM’000 RM’000 Assets Non-current assets Property, plant and equipment (136,469) – Right-of-use assets 144,993 2,875 Total assets 8,524 2,875 Liabilities Non-current liability Lease liabilities 3,333 1,217 Current liability Lease liabilities 5,191 1,658 Total liabilities 8,524 2,875 Tropicana Corporation Berhad Annual Report 2019 pg 130 About Tropicana Our Strategic Performance Our Leadership