Dagang NeXchange Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DAGANG NeXCHANGE BERHAD 112 1. BASIS OF PREPARATION (CONTINUED) (a) Statement of compliance (continued) The Group has not applied in advance the following accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:- MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date Amendments to MFRS 3: Definition of a Business 1 January 2020 Amendments to MFRS 9, MFRS 139 and MFRS 7: Interest Rate Benchmark Reform 1 January 2020 Amendments to MFRS 101 and MFRS 108: Definition of Material 1 January 2020 Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020 MFRS 17 Insurance Contracts 1 January 2021 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an investor and its Associate or Joint Venture Deferred The adoption of the above accounting standard(s) and/or interpretation(s) (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon its initial application. (b) Basis of measurement The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2. (c) Functional and presentation currencies These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. There are no significant areas of estimation of uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements, other than as follows: (i) Revenue The Group’s contract for the implementation of National Single Window (“NSW”) will be ending in August 2021. Thus, there can be no assurance that the Group will be able to continue to enjoy similar level of revenue when the NSW contract expires. (ii) Impairment of goodwill The assessment of whether goodwill is impaired requires an estimation of the value in use of the cash-generating unit to which the goodwill is allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at the reporting date is disclosed in Note 5 to the financial statements.