FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 192 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 2 BASIS OF PREPARATION (cont’d.) (i) Standards, amendments to published standards and interpretations adopted by the Group and the Company as at 1 January 2013: (Cont’d.) • FRS 13 “Fair Value Measurement” aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair valuemeasurement 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. The adoption of these standards, amendments to published standards and interpretations resulted in additional disclosures in the financial statements. (ii) Amendment to published standards that is applicable to the Group and the Company and has been early adopted: During the financial year, the Group and the Company has early adopted Amendment to FRS 136 “Impairment of assets” (effective from 1 January 2014) and has applied this standard from the financial year commencing 1 January 2013. Amendments to FRS 136 “Impairment of Assets” removed certain disclosures of the recoverable amount of cash generating units (“CGU”) which had been included in FRS 136 by the issuance of FRS 13. The effect of early adoption is not significant to the Group and the Company. (iii) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and the Company but not yet effective and have not yet been early adopted: Effective from financial period beginning 1 January 2014 • Amendment to FRS 132 “Financial Instruments: Presentation” (effective from 1 January 2014) does not change the current offsetting model in FRS 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 FRS 132 offsetting criteria. • Amendments to FRS 10, FRS 12 and FRS 127 (effective from 1 January 2014) introduce an exception to consolidation for investment entities. Investment entities are entities whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both and evaluate the performance of its investments on fair value basis. The amendments require investment entities to measure particular subsidiaries at fair value instead of consolidating them. • IC Interpretation 21 “Levies” (effective from 1 January 2014) sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation clarifies that a liability to pay a levy is recognised when the obligating event occurs. Obligating event is the event identified by the legislation that triggers the payment of the levy. 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. Effective for annual periods beginning on or after 1 July 2014 with earlier application permitted • Amendments to FRS 2 “Share-based Payments” (effective on or after 1 July 2014) clarifies the definition of ‘vesting conditions’ by separately defining ‘performance condition’ and ‘service condition’ to ensure consistent classification of conditions attached to a share-based payment. • Amendments to FRS 3 “Business Combinations” (effective on or after 1 July 2014) clarifies that when contingent consideration meets the definition of financial instrument, its classification as a liability or equity is determined by reference to FRS 132 “Financial Instruments: Presentation”. It is also clarifies that contingent consideration that is classified as an asset or a liability shall be subsequently measured at fair value at each reporting date and changes in fair value shall be recognised in profit or loss.