ENRA Group Berhad Annual Report 2019

157 ENRA GROUP BERHAD ∞ Annual Report 2019 page Notes to the Financial Statement 31 March 2019 45. ADOPTION OF NEWMFRSs AND AMENDMENTS TO MFRSs (cont’d) 45.2 Explanation of transition to MFRSs (cont’d) Notes to the reconciliations (cont’d) (i) Adoption of MFRS 9 (cont’d) (b) Impairment of financial assets (cont’d) Impairment for receivables from related parties are recognised based on the general approach within MFRS 9 using the forward looking expected credit loss model. The methodology used to determine the amount of the impairment is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those in which the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those in which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. (c) The MFRS 9 adjustments are mainly due to: (i) Reclassification of the financial assets and financial liabilities as follows: Classification Group and Company Existing under MFRS 139 New under MFRS 9 Financial assets Trade and other receivables L&R AC Short term funds FVTPL FVTPL Derivative assets FVTPL FVTPL Contract assets L&R AC Cash and bank balances L&R AC Financial liabilities Contingent consideration FVTPL FVTPL RCPS liability OFL AC Trade and other payables OFL AC Borrowings OFL AC (ii) Additional credit losses to be recognised on trade and other receivables, and amounts owing by joint ventures and associates.