FGV Annual Report 2016

ANNUAL INTEGRATED REPORT 2016 177 FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 2 BASIS OF PREPARATION (CONTINUED) (iii) Accounting pronouncements that are not yet effective and have not been early adopted by the Group and the Company: (continued) Effective for annual periods beginning on or after 1 January 2018 with earlier application permitted • MFRS 9 "Financial Instruments" • MFRS 15 "Revenue" • Amendments to MFRS 141 "Agriculture" and MFRS 116 "Property, Plant and Equipment" (effective 1 January 2016, but adopted by the Group after 1 January 2018 upon MFRS adoption) • Amendments to MFRS 2 "Share-based Payment" - Classification and Measurement of Share-based Payment Transactions • Amendments to MFRS 140 "Investment Property" - Clarification on Change in Use - Assets transferred to, or from, Investment Properties • Annual Improvements to MFRS 1 "First-time Adoption of Malaysian Financial Reporting Standards" • Annual Improvements to MFRS 128 "Investments in Associates and Joint Ventures" • IC Interpretation 22 "Foreign Currency Transactions and Advance Consideration" Effective for annual periods beginning on or after 1 January 2019 with earlier application permitted • MFRS 16 "Leases" The effects of the above new accounting standards, amendments to existing standards and other accounting pronouncements are currently being assessed by the Directors. 3 SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) Basis of consolidation and investment in subsidiaries The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of financial year. Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Acquisition accounting The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of the non-controlling interests. The Group recognises any non-current controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. At the end of reporting period, non-controlling interests consists of amount calculated on the date of combinations and its share of changes in the subsidiary's equity since the date of combination.