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NOTES TO THE FINANCIAL STATEMENTS (cont’d)<br />
31 DECEMBER 2012<br />
2 SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
2.3 Standards Issued but not yet Effective (contd)<br />
(b) MFRS 9: Financial Instruments<br />
MFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities.<br />
It replaces the parts of MFRS 139 that relate to the classification and measurement of financial instruments.<br />
MFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair<br />
value and those measured at amortised cost. The determination is made at initial recognition. The classification<br />
depends on the entity’s business model for managing its financial instruments and the contractual cash<br />
flow characteristics of the instrument. For financial liabilities, the standard retains most of the MFRS 139<br />
requirements. The main change is that, in cases where the fair value option is taken for financial liabilities,<br />
the part of a fair value change due to an entity’s own credit risk is recorded directly in other comprehensive<br />
income, unless this creates an accounting mismatch. The Company is yet to assess MFRS 9’s full impact and<br />
intends to adopt MFRS 9 no later than the accounting period beginning on or after 1 January 2015.<br />
(c) MFRS 10: Consolidated Financial Statements<br />
MFRS 10 establishes a single control model that applies to all entities including special purpose entities. It<br />
establishes control as the basis of determining which entities are consolidated in the consolidated financial<br />
statements and sets out the accounting requirements for the preparation of consolidated financial statements.<br />
It replaces all the guidance on control and consolidation in MFRS 127: Consolidated and separate financial<br />
statements and IC Interpretation 12: Consolidation – special purpose entities.<br />
(d) MFRS 12: Disclosure of Interests in Other Entities<br />
MFRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and<br />
structured entities. A number of new disclosures are required. This standard affects disclosure only and has<br />
no impact on the Group’s financial position or performance.<br />
(e) MFRS 13: Fair Value Measurement<br />
MFRS 13 aims to improve consistency and reduce complexity by establishing a single source of fair value<br />
measurement and disclosure requirements for use across MFRSs. MFRS 13 does not change when an entity is<br />
required to use fair value, but rather provides guidance on how to measure fair value under MFRS when fair<br />
value is required or permitted. The Group is currently assessing the impact of adoption of MFRS 13.<br />
(f) Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income<br />
The amendments change the grouping of items presented in Other Comprehensive Income. Items that could<br />
be reclassified (or “recycled”) to profit of less at future point in time (for example, upon decrecognition or<br />
settlement) would be presented separately from items that will never be reclassified. The amendment affects<br />
presentation only and has no impact on the Group’s financial position or performance.<br />
(g) MFRS 127: Separate Financial Statements (revised)<br />
As consequence of the new MFRS 10 and MFRS 12, the revised MFRS 127 is limited to the accounting for<br />
subsidiaries, jointly controlled entities and associates in separate financial statements.<br />
(h) Amendments to MFRS 132: Financial Instruments: Presentation<br />
The amendment does not change the current offsetting model in MFRS 132. It clarifies the meaning of “currently<br />
has a legal enforceable right of set-off” that the right of set-off must be available today (not contingent on<br />
a future event) and legally enforceable for all counterparties in the normal course of business.<br />
Gunung Capital Berhad (330171-P)<br />
53<br />
annual report | 2012