FGV Annual Report 2012

22 Felda Global Ventures Holdings Berhad 2 BASIS OF PREPARATION (continued) (iii) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and Company but not yet effective and have not yet been early adopted: (continued) Effective from financial period beginning 1 January 2013 (continued) • Amendments to FRS 10, FRS 11 and FRS 12 “Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance”(effective from 1 January 2013) clarifies that the date of initial application is the first day of the annual period in which FRS 10 is adopted. The entities should assess the control at the date of initial application which will impact the treatment in the immediately preceding comparative period.The amendment also requires certain comparative disclosures in relation to subsidiaries, associates and jointly controlled entities under FRS 12 upon transition. Any difference between FRS 10 carrying amounts and previous carrying amounts at the beginning of the immediately preceding annual period is adjusted to equity. • Improvement to FRSs relating to IASB Improvements to IFRSs in 2011 – Amendment to FRS 16 “Property, Plant and Equipment”clarifies that spare parts and servicing equipment are classified as property, plant and equipment rather than inventory when they meet the definition of property, plant and equipment. • IC Interpretation 20“Stripping Costs in Production Phase of a Surface Mine”(effective from 1 January 2013) sets out the accounting for overburden waste removal (stripping) costs in the production phase of a mine. It requires entities reporting under MFRS to write off existing stripping assets to opening retained earnings if the assets cannot be attributed to an identifiable component of an ore body. The Group and the Company will apply the above standards from the financial period beginning on 1 January 2013. The effects of the above standards are currently being assessed by the Directors. Effective from financial period beginning 1 January 2014 MFRS 1“First-time Adoption of MFRS”provides for certain optional exemptions and certain mandatory exceptions for first-time MFRS adopters. The impact of adoption of MFRS 1 to the Group and the Company based on mandatory exemptions and optional exemptions for first-time MFRS adoptions is still being assessed by the Directors. • MFRS 141“Agriculture” • Amendment to MFRS 132“Financial Instruments: Presentation” The principal effects resulting from the adoption of MFRS 141 and Amendment to MFRS 132 are discussed below: • MFRS 141“Agriculture”(effective from 1 January 2012) requires biological assets and agricultural produce at the point of harvest to be measured at fair value less costs to sell. Upon adoption of MFRS 141 on 1 January 2014, the biological assets for the Group will be fair valued and the impact of the fair value adjustment will be accounted for retrospectively by adjusting retained earnings. Subsequent fair value changes after that date of biological assets shall be included in profit and loss in the period in which the changes arise. • Amendment to MFRS 132 “Financial Instruments: Presentation” (effective from 1 January 2014) does not change the current offsetting model in MFRS 132. It clarifies the meaning of‘currently has a legally enforceable right of set-off’that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counterparties in the normal course of business. It clarifies that some gross settlement mechanisms with features that are effectively equivalent to net settlement will satisfy the MFRS 132 offsetting criteria. The Group and the Company will apply the above standards from the financial period beginning on 1 January 2014. The effects of the above standards are currently being assessed by the Directors. Notes to the Financial Statements for the financial year ended 31 December 2012