Wah Seong Corporation Berhad Annual Report 2019

96 WAH SEONG CORPORATION BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.2 Changes in accounting policies and disclosures (continued) (b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and Company but not yet effective (continued) Amendments to References to the Conceptual Framework in MFRS Standards (“Amendments”) The MASB also issued the Amendments to update references and quotations to 14 Standards, so as to clarify the version of Conceptual Framework these Standards refer to, for which the effective date above applies. The amendments will be applied retrospectively in accordance with MFRS 109 unless retrospective application would be impracticable or involve undue cost or effort. • Amendments to the MFRS 101 and MFRS 108 (effective 1 January 2020) clarify the definition of materiality and use a consistent definition throughout MFRSs and the Conceptual Framework for Financial Reporting. The definition of ‘material’ has been revised as “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments also: (i) clarify that an entity assesses materiality in the context of the financial statements as a whole. (ii) explain the concept of obscuring information in the new definition. Information is obscured if it has the effect similar as omitting or misstating of that information. For example, material transaction is scattered throughout the financial statements, dissimilar items are inappropriately aggregated, or material information is hidden by immaterial information. (iii) clarify the meaning of “primary users of general purpose financial statements” to whom those financial statements are directed, by defining them as existing and potential investors, lenders and other creditors that must rely on general purpose financial statements for much of the financial information they need. The amendments will be applied prospectively. • Amendments to the MFRS 3 ‘Definition of a Business’ (effective 1 January 2020) revise the definition of a business. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments provide guidance to determine whether an input and a substantive process are present, including situation where an acquisition does not have outputs. To be a business without outputs, there will now need to be an organised workforce. It is also no longer necessary to assess whether market participants are capable of replacing missing elements or integrating the acquired activities and assets. In addition, the revised definition of the term ‘outputs’ is narrower, focusses on goods or services provided to customers, generating investment returns and other income but excludes returns in the form of cost savings. The amendments introduce an optional simplified assessment known as ‘concentration test’ that, if met, eliminates the need for further assessment. Under this concentration test, if substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset (or a group of similar assets), the assets acquired would not represent a business. The amendments will be applied prospectively. The Group and the Company will apply these amendments from financial year beginning on 1 January 2020. It is not expected to result in any material impact on the financial position and results of the Group and the Company upon adoption of these amendments.