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Notes to the
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.2 Standards issued but not yet effective (cont’d.)
MFRS 16 Leases (cont’d.)
Classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented
as operating cash flows, whereas under MFRS 16, the lease payments will be split into a principal (which will
be presented as financing cash flows) and an interest portion (which will be presented as operating cash
flows).
Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors
will continue to classify all leases using the same classification principle as in MFRS 117 and distinguish
between two types of leases: operating and finance leases.
MFRS 16 is effective for annual periods beginning on or after 1 January 2019. A lessee can choose to apply
the standard using either a full retrospective or a modified retrospective approach. The Group is currently
assessing the potential effect of MFRS 16 on its financial statements.
2.3 Summary of significant accounting policies
(a) Subsidiaries and basis of consolidation
(i) Subsidiaries
A subsidiary company is an entity over which the Group has the following:
(i) Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
In the Company’s separate financial statements, investments in subsidiary companies are
accounted for at cost less impairment losses. On disposal of such investments, the difference
between net disposal proceeds and their carrying amounts is included in profit or loss.
(ii) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and
its subsidiary companies as at the reporting date. The financial statements of the subsidiary
companies used in the preparation of the consolidated financial statements are prepared for
the same reporting date as the Company. Consistent accounting policies are applied for like
transactions and events in similar circumstances.
Kumpulan Fima Berhad
(11817-V)
Annual Report 2019
126