Yinson Annual Report 2020

238 Notes to the financial statements (cont’d) For the financial year ended 31 January 2020 Yinson Holdings Berhad SECTION 7 ACCOUNTABILITY 4. Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Company but not yet effective (CONTINUED) (a) Financial year beginning on/after 1 February 2020 (continued) (iv) Amendments to MFRS 101 “Amendments on Classification of Liabilities as Current or Non-current” The MFRS 101 classification principle requires an assessment of whether an entity has the substantive right to defer settlement of a liability at the end of the reporting period. The amendments clarify that when the right to defer settlement is subject to complying with specified conditions, the right only exists at the end of the reporting period if the entity complies with those conditions at that date. The entity must comply with the conditions at the end of the reporting period even if the lender does not test compliance until a later date. Also, classification is unaffected by the expectations of the entity or events after the reporting date (e.g. waiver obtained or breach of loan covenant). In addition, the amendments clarify that when a liability could be settled by the transfer of an entity’s own equity instruments (e.g. a conversion option in a convertible bond), the conversion option does not affect the classification of the convertible bond if the option meets the definition of an equity instrument in accordance with MFRS 132 “Financial Instruments: Presentation”. A conversion option that is not an equity instrument should therefore be considered in the current or non-current classification of a convertible instrument. The amendments shall be applied retrospectively. The Group and the Company are currently assessing the impact of the adoption and application of the above new/ amended standards. 5. Critical accounting estimates and judgements Estimates and judgements are continually evaluated by the Directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. (a) Operating lease commitments – Group as lessor The Group has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the asset, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.