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Annual Report 2020
163
Notes to the Financial Statements
As at 31 March 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(r) Financial assets (cont’d.)
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e., removed from the Group’s and the Company's statement of financial position)
when:
-
The rights to receive cash flows from the asset have expired; or
-
The Group and the Company have transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a third party
under a ‘pass-through’ arrangement; and either (a) the Group and the Company have transferred
substantially all the risks and rewards of the asset, or (b) the Group and the Company have neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of
the asset.
When the Group and the Company have transferred its rights to receive cash flows from an asset or has
entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks
and rewards of ownership. When it has neither nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Group and the Company continue to recognise the
transferred asset to the extent of its continuing involvement. In that case, the Group and the Company
also recognise an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Group and the Company have retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower
of the original carrying amount of the asset and the maximum amount of consideration that the Group and
the Company could be required to repay.
(s) Impairment of financial assets
The Group and the Company recognises an allowance for expected credit losses (“ECLs”) for all debt
instruments not held at fair value through profit or loss. ECLs are based on difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group and the Company expect
to receive, discounted at an approximation of the original effective interest rate. The expected cash flows
will include cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).