FGV Annual Report 2012

21 F i n a n c i a l S t a t e m e n t s 2 0 1 2 P e n y a t a K e w a n g a n 2 BASIS OF PREPARATION (Continued) (ii) Amendment to published standards that is applicable to the Group and Company and has been early adopted: During the financial year, the Group and Company has early adopted Amendment to FRS 119“Employee Benefits”(effective from 1 January 2013) and has applied this standard from the financial year commencing 1 January 2012. Amendment to FRS 119“Employee Benefits”(effective from 1 January 2013) makes significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employee benefits. Actuarial gains and losses will no longer be deferred using the corridor approach. FRS 119 shall be withdrawn on application of this amendment. The effect of early adoption is not significant to the Group and Company. (iii) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and Company but are not yet effective and have not yet been early adopted: Effective from financial period beginning 1 January 2013 • Amendment to FRS 101“Presentation of Items of Other Comprehensive Income”(effective from 1 July 2012) requires entities to separate items presented in‘other comprehensive income’ (OCI) in the statement of comprehensive income into two groups, based on whether or not they may be recycled to profit or loss in the future. The amendments do not address which items are presented in OCI. • FRS 10“Consolidated Financial Statements”(effective from 1 January 2013) changes the definition of control. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. It establishes control as the basis for determining which entities are consolidated in the consolidated financial statements and sets out the accounting requirements for the preparation of consolidated financial statements. It replaces all the guidance on control and consolidation in FRS 127 “Consolidated and Separate Financial Statements”and IC Interpretation 112“Consolidation – Special Purpose Entities”. • FRS 11 “Joint Arrangements” (effective from 1 January 2013) requires a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations arising from the arrangement, rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. • FRS 12 “Disclosures of Interests in Other Entities” (effective from 1 January 2013) sets out the required disclosures for entities reporting under the two new standards, FRS 10 and FRS 11, and replaces the disclosure requirements currently found in FRS 128 “Investments in Associates”. It requires entities to disclose information that helps financial statement readers to evaluate the nature, risks and financial effects associated with the entity’s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. • FRS 13“FairValue Measurement”(effective from 1 January 2013) aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across FRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards. The enhanced disclosure requirements are similar to those in FRS 7“Financial Instruments: Disclosures”, but apply to all assets and liabilities measured at fair value, not just financial ones. • Revised FRS 127 “Separate Financial Statements” (effective from 1 January 2013) includes the provisions on separate financial statements that are left after the control provisions of FRS 127 have been included in the new FRS 10. • Revised FRS 128“Investments in Associates and Joint Ventures”(effective from 1 January 2013) includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of FRS 11. • Amendments to FRS 1 “Government Loans” (effective from 1 January 2013) allows a first-time adopter to use its previous GAAP carrying amount for such loans on transition to MFRS. It requires entities to classify all government loans as a financial liability or an equity instrument in accordance with FRS 132 “Financial Instruments: Presentation” and apply the requirements in FRS 9 “Financial Instruments” and FRS 120 “Accounting for Government Grants and Disclosure of Government Assistance” prospectively to government loans existing at the date of transition to FRSs and shall not recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant. • Amendment to FRS 7“Financial Instruments: Disclosures”(effective from 1 January 2013) requires more extensive disclosures focusing on quantitative information about recognised financial instruments that are offset in the statement of financial position and those that are subject to master netting or similar arrangements irrespective of whether they are offset.