Notes To The Financial Statements 31 March 2024 (Cont’d) 177 FINANCIAL STATEMENTS & OTHERS 34. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (CONT'D) 34.1 New MFRSs adopted during the financial year (Cont'd) (a) MFRS 17 Insurance Contracts and Amendments to MFRS 17 Initial Application of MFRS 17 and MFRS9 - Comparative Information MFRS 17 establishes the principles for recognition, measurement, presentation and disclosure of insurance contracts and supersedes MFRS 4 Insurance Contracts. MFRS 17 outlines three measurement approaches for different types of insurance contracts – general measurement model, premium allocation approach and variable fee approach. The general measurement model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It takes into account market interest rates and the impact of options and guarantees of policyholders. The general measurement model is simplified if certain criteria are met by measuring the liability for remaining coverage using the premium allocation approach. Variable fee approach is applicable for insurance contracts with direct participation features. Amendments to MFRS 17 adds a new transition option to MFRS 17 (the ‘classification overlay’) to alleviate operational complexities and one-time accounting mismatches in comparative information between insurance contract liabilities and related financial assets on the initial application of MFRS17. It allows presentation of comparative information about financial assets to be presented in a manner that is more consistent with MFRS 9 Financial Instruments. The Group and the Company do not have any contracts that meet the definition of an insurance contract under MFRS 17, except for corporate guarantee provided to subsidiaries, which are financial guarantee contracts that the Group and the Company had previously explicitly asserted under MFRS 4. The Group and the Company made an irrevocable choice to apply MFRS 9 Financial Instruments on a contract-by-contract basis to these financial guarantee contracts as at the date of transition to MFRS 17 In relation to this, the Company recognised financial guarantee contracts, recognising the difference in retained earnings. The impact on transition is summarised below: As at As at 31 March 1 April 2023 Impact 2023 Company Note RM’000 RM’000 RM’000 Borrowings 19 13,251 91 13,342 Deferred tax assets - * - Accumulated losses (44,322) (91) (44,413) * The deferred tax assets are not recognised as it is immaterial to the Company
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