BIMB Integrated Annual Report 2019

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.1 Basis of preparation (continued) (a) Statement of compliance (continued) The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company. (continued) MFRSs, Interpretations and amendments effective for annual periods beginning or after a date yet to be confirmed • Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The Group and the Company plan to apply the abovementioned standards, amendments and interpretations: • from the annual period beginning on 1 January 2020 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2020. • from the annual period beginning on 1 January 2021 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2021. Apart from MFRS 17 Insurance Contracts, the initial application of the accounting standards, amendments and interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company. The Group is in the process of assessing the financial impact from the application of MFRS 17 Insurance Contracts onto the Group’s financial statements. (b) Changes in significant accounting policies MFRS 16, Leases MFRS 16 supersedes MFRS 117 ‘Leases’ and the related interpretations. The Group has adopted MFRS 16 under modified retrospective approach effective from 1 January 2019 upon its mandatory adoption date, but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019. Prior to 1 January 2019, the Group classified leases of property as operating leases. Payments made under operating leases were charged to profit or loss on a straight-line basis over the period of the lease. On adoption of MFRS 16, leases with non-cancellable agreements or either party has an economic incentives not to terminate the lease such that it would incur significant penalty, are recognised as Right-Of-Use (“ROU”) assets and corresponding liabilities at the date at which the leased assets are available for use by the Group. As a practical expedient, the Group has elected not to separate non-lease components from lease components for property lease, and instead account for each lease component and any associated non-lease components as a single lease component. Right-of-use asset for a non-cancellable property lease is measured on a retrospective basis as if the new rules had always been applied but discounted using the lessee’s incremental borrowing rate as of 1 January 2019. All other ROU assets are measured at the amount of the lease liability on adoption, adjusted for any prepaid or accrued lease payments and discounted using the lessee’s incremental borrowing rate as of 1 January 2019. The right-of-use assets are depreciated over the lease term on a straight-line basis. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 183 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary