notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Changes in accounting policies and disclosures (continued)
(b)
Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group and Company but not yet
effective (continued)
• Annual Improvements to MFRSs 2012-2014 Cycle
i)
Amendments to MFRS 5 “ Non-current Assets Held for Sale and Discontinued Operations” clarifies that, when an asset (or disposal
group) is reclassified from “held for sale” to “held for distribution”, or vice versa, this does not constitute a change to a plan of plan of
sale or distribution, and does not have to be accounted for as such. This means that the asset (or disposal group) does not need to be
reinstated in the financial statements as if it had never been classified as “held for sale” or “held for distribution” simply because the
manner of disposal has changed. The amendment also explains that the guidance on changes in a plan of sale should be applied to an
asset (or disposal group) which ceases to be held for distribution but is not reclassified as “held for sale”.
ii)
Amendments to MFRS 7 “Financial Instruments: Disclosures” addresses two amendments namely on:
-
Servicing contracts - If an entity transfers a financial asset to a third party under conditions which allow the transferor to
derecognise the asset, MFRS 7 requires disclosure of all types of continuing involvement that the entity might still have in
the transferred assets. The standard provides guidance about what is meant by continuing involvement. The amendment is
prospective with an option to apply retrospectively. There is a consequential amendment to MFRS 1 to give the same relief to
first time adopters.
-
Interim financial statements - the amendments clarifies that the additional disclosure required by the amendments to MFRS
7 “Disclosure- Offsetting Financial Assets and Financial Liabilities” is not specifically required for all interim periods unless
required by MFRS 134. This amendment is retrospective.
iii)
Amendments to MFRS 134 “Interim Financial Reporting” clarifies what is meant by the reference in the standard to “information
disclosed elsewhere in the interim financial report”. The amendment also amends MFRS 134 to require a cross-reference from the
interim financial statements to the location of that information. The amendment is retrospective.
The Group and the Company will apply these amendments from financial year beginning on 1 January 2017. It is not expected to result in any
material impact on the financial position and results of the Group and the Company upon adoption of these amendments.
• MFRS 15 “Revenue from Contracts with Customers” is a converged standard on revenue recognition. It replaces MFRS 11 “Construction
Contracts”, MFRS 118 “Revenue” and related interpretations. Revenue is recognised when a customer obtains control of a good or service.
A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. The core principle of
MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be identified in exchange for those goods or services. An entity recognises revenue in accordance
with that core principle by applying the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transportation price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
MFRS 15 also includes a cohesive set of disclosure requirement that will result in an entity providing users of financial statements with
comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with
customers.
The standard is effective for annual periods beginning on or after 1 January 2017 and earlier application is permitted. The Group and the
Company is assessing the impact of MFRS 15.
68
Wah Seong Corporation Berhad • Annual Report 2014
