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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Functional and Foreign Currencies (Cont’d)
(iii) Foreign operations
Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of
the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at
exchange rates ruling at the dates of the transactions. All exchange differences arising on translation are taken
directly to other comprehensive income and accumulated in equity, attributed to the owners of the Company and
non-controlling interests, as appropriate.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and
liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and
translated at the closing rate at the end of the reporting period.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign subsidiary, or a
partial disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal
of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial
asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the
owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal. The portion that
related to non-controlling interests is derecognised but is not reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over
the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling
interests and are not recognised in profit or loss. When the Group disposes of only part of its investment in an
associate that includes a foreign operation while retaining significant influence, the proportionate share of the
accumulative exchange differences is reclassified to profit or loss.
Financial Instruments
Financial assets and financial liabilities are recognised in the statements of financial position when the Group has
become a party to the contractual provisions of the instruments.
Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with
the substance of the contractual arrangement and their definition in MFRS 132. Interest, dividends, gains and losses
relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders
of financial instruments classified as equity are charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on
a net basis or to realise the asset and settle the liability simultaneously.
A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the
acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss)
are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial
instrument at fair value through profit or loss are recognised immediately in profit or loss.
Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement
associated with each item.
(i)
Financial assets
On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss,
held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as
appropriate.
Notes To The Financial Statements
(cont’d)