ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 107 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 14. CONTRACT ASSETS Group 2020 RM’000 2019 RM’000 Aggregate pre-contract costs incurred to date - 2,387 Less: Attributable loss - (19) - 2,368 Less: Progress billings - (2,368) - - Contract assets represent the timing differences in revenue recognition and the milestone billings. The milestone billings are structured and/or negotiated with customers to reflect physical completion of the contracts. Contract assets are transferred to receivables when the rights to economic benefits become unconditional. This usually occurs when the Group issues billing to the customer. Contract liabilities are recognised as revenue when performance obligations are satisfied. No impairment is required as the amount is negligible. 15. DERIVATIVE ASSETS 2020 2019 Contract/ Notional amount RM’000 Fair value of derivatives RM’000 Contract/ Notional amount RM’000 Fair value of derivatives RM’000 Group Current Forward foreign currency contracts 11,934 225 30,421 512 Company Current Forward foreign currency contracts 10,135 188 30,421 512 The Group and Company uses forward foreign currency contracts to manage some of the foreign currency transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for period consistent with foreign currency transaction exposure and fair value changes exposure. The Group and Company do not apply hedge accounting. Forward foreign currency contracts represent selling and buying contracts are used to hedge the Company’s advance to a subsidiaries denominated in British Pound and to hedge the Group’s payable to certain suppliers denominated in US Dollar and Euro for which the commitments existed at the reporting date. As disclosed in Note 30 to the financial statements, the Group and the Company recognised a loss of RM287,000 (2019: gain of RM401,000) and RM324,000 (2019: gain of RM401,000) respectively arising from the fair value changes in derivatives. The methods and assumptions applied in determining the fair values of derivatives are disclosed in Note 40(b)(v) to the financial statements.