2019 UEM Edgenta Annual Report

154 Notes to the Financial Statements For the year ended 31 December 2019 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D.) 2.2 Changes in accounting policies (cont’d.) Effective for annual periods beginning on or after Amendments to MFRS 9: Prepayment Features with Negative Compensation 1 January 2019 MFRS 16: Leases 1 January 2019 Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures 1 January 2019 Annual improvements to MFRS Standards 2015-2017 Cycle 1 January 2019 Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement 1 January 2019 IC Interpretation 23: Uncertainty over Income Tax Treatments 1 January 2019 The adoption of the above standards and interpretation did not have any effect on the nancial statements of the Group and of the Company, except as disclosed below. MFRS 16 Leases The Group applied MFRS 16 Leases for the first time. MFRS 16 supersedes MFRS 117 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the statements of financial position. Lessor accounting under MFRS 16 is substantially unchanged from MFRS 117. Lessors will continue to classify leases as either operating or finance leases using similar principles as in MFRS 117. Therefore, MFRS 16 does not have an impact for leases where the Group is the lessor. The Group adopted MFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard recognised at the date of initial application. The Group elected to use the transition practical expedient to not reassess whether a contract is, or contains a lease at 1 January 2019. Instead, the Group applied the standard only to contracts that were previously identified as leases applying MFRS 117 and IFRIC 4 at the date of initial application.