Yinson Annual Report 2021

226 YINSON HOLDINGS BERHAD SECTION 07 : ACCOUNTABILITY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2021 3. Standards, amendments to published standards and interpretations, which are applicable and adopted by the Group and the Company (continued) Interest rate benchmark reform In accordance with the transition provisions, the Group has adopted the amendments to MFRS 9 and MFRS 7 retrospectively with effect from 1 February 2020 to hedging relationships that existed at the start of the reporting period or were designated thereafter, and to the amount accumulated in the cash flow hedge reserve at that date. The amendments provide temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by inter-bank offered rate (“IBOR”) reform. The reliefs have the effect that IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness continues to be recorded in the income statement. The reliefs will cease to apply when the uncertainty arising from interest rate benchmark reform is no longer present. Note 5(i) provides information about the uncertainty arising from IBOR reform for hedging relationships for which the Group has applied the reliefs. No changes were required to any of the amounts recognised in the current or prior period as a result of these amendments. 4. Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Company but not yet effective (a) Financial year beginning on/after 1 February 2021 (i) Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16 "Interest Rate Benchmark Reform - Phase 2" The Interest Rate Benchmark Reform—Phase 2 amends some specific requirements in MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement, MFRS 7 Financial Instruments: Disclosures, MFRS 4 Insurance Contracts and MFRS 16 Leases; with respect to issues that affect financial reporting during the reform of an interest rate benchmark. The Amendments provides a practical expedient whereby a company would not derecognise or adjust the carrying amount of financial instruments for modifications required by interest rate benchmark reform, but would instead update the effective interest rate to reflect the change in the interest rate benchmark. On hedging relationships, entities would be required to amend the formal designation of a hedging relationship to reflect the modifications and/or changes made to the hedged item and/or hedging instruments as a result of the reform. However, the modification does not constitute discontinuation of the hedging relationship nor the designation of a new hedging relationship. The amendments shall be applied retrospectively. (ii) Amendments to MFRS 16 "COVID-19-Related Rent Concessions" Amendments to MFRS 16 "COVID-19-Related Rent Concessions" grant an optional exemption for lessees to account for a rent concession related to COVID-19 in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as a variable lease payment in the period in which the event or condition that triggers the reduced payment occurs. The amendment, however, does not make any changes to lessor accounting. The exemption only applies to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met: (a) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; (b) any reduction in lease payments affects only payments due on or before 30 June 2021; and (c) there is no substantive change to other terms and conditions of the lease. The amendments shall be applied retrospectively.