FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 337 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 62 FIRST TIME ADOPTION OF MFRS FRAMEWORK Transition from FRS to MFRS As stated in Note 2 to the financial statements, these are the first set of financial statements of the Group and the Company for the year ended 31 December 2018, prepared in accordance with MFRSs and applying MFRS 1 ‘ First-time Adoption of MFRSs ’ . Aside from the short-term exemption on first-time application of MFRS 9 ‘ Financial Instruments ’ and certain transition elections disclosed in Note 3(g), the Group and the Company have consistently applied the same accounting policies in its opening MFRS statement of financial position at the date of transition, 1 January 2017, and throughout all periods presented, as if these policies had always been in effect. These policies comply with each MFRS effective as at 31 December 2018, including MFRS 15 ‘ Revenue from Contracts with Customers ’ and MFRS 141 ‘ Agriculture ’ . The financial statements for financial year 2017 were prepared in accordance with Financial Reporting Standards (FRSs). Accordingly, the comparative figures for 2017 in these financial statements have been restated to give effect to these changes. Note 62(a) discloses the impact of the transition to MFRS on the Group’s reported financial position, financial performance and cash flows. (i) MFRS 1 “ First time adoption of Malaysian Financial Reporting Standards ” ( “ MFRS 1 ” ) The Group and the Company have applied the following mandatory exceptions as required by MFRS 1: (a) Estimates MFRS estimates as at transition date are consistent with the estimates as at the same date made in conformity with FRS. (b) Classification and measurement of financial assets For financial assets that exist at the beginning of the first MFRS reporting period, at 1 January 2018, an assessment was performed as to whether a financial asset meets the condition to be classified and measured as financial asset measured at amortised cost or financial asset measured at fair value through other comprehensive income in accordance with MFRS 9 on the basis of the facts and circumstances that exist at the beginning of the first MFRS reporting period. (c) Impairment of financial assets Impairment requirements in MFRS 9 are applied retrospectively for debt instruments measured at amortised cost or fair value through other comprehensive income, lease receivable, contract asset or loan commitment. The requirements are applied using reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the initial recognition of financial instrument and compare that to the credit risk at the beginning of the first MFRS reporting period, at 1 January 2018, to determine if there has been a significant increase in credit risk. (d) Hedge accounting Hedge accounting can only be applied prospectively from the date of transition to a hedging relationship that qualifies for hedge accounting under MFRS 9 at date of transition. Hedging relationships cannot be designated retrospectively.