Yinson Annual Report 2021

228 YINSON HOLDINGS BERHAD SECTION 07 : ACCOUNTABILITY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2021 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) (c) Financial year beginning on/after 1 February 2023 (continued) (i) Amendments to MFRS 101 "Classification of Liabilities as Current or Non-Current" (continued) 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. (ii) Amendments to MFRS 101 "Disclosure of Accounting Policies" Amendments to MFRS 101 "Disclosure of Accounting Policies" requires entities to disclose their material accounting policy information rather than their significant accounting policies. The Amendments, amongst others, also include examples of circumstances in which an entity is likely to consider an accounting policy information to be material to its financial statements. To support the Amendments to MFRS 101, MFRS Practice Statement 2 was also amended to provide guidance on how to apply the concept of materiality to accounting policy information disclosures. The guidance and examples provided in the MFRS Practice Statement 2 highlight the need to focus on entity-specific information and demonstrate how the four-step materiality process can address standardised (or boilerplate) information and duplication of requirements of MFRSs in the accounting policy information disclosures. (iii) Amendments to MFRS 108 "Definition of Material" Amendments to MFRS 108 "Definition of Material" revises the definition of accounting estimates to clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. The distinction is important because changes in accounting estimates are applied prospectively to transactions, other events, or conditions from the date of that change, but changes in accounting policies are generally also applied retrospectively to past transactions and other past events. The Group and the Company are currently assessing the impact of the adoption and application of the above new/ amended standards. Other standards and amendments are not relevant for the Group and the Company. 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) Critical judgement in determining the lease classification (i) Operating leases – 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.