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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Financial Instruments (Cont’d)
(ii) Financial liabilities (Cont’d)
• Other financial liaibilities
Other financial liabilities are initially measured at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
(iii) Equity instruments
Equity instruments classified as equity are measured at cost and are not remeasured subsequently.
• Ordinary shares
Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction,
net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
• Treasury Shares
When the Company’s own shares recognised as equity are bought back, the amount of the consideration paid,
including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that
are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total
equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury
shares.
Where treasury shares are sold, the difference between the sales consideration and the carrying amount of the
treasury shares are shown as a movement in equity. When the consideration received is more than the carrying
amount, the credit difference arising is taken to the share premium account. Where the consideration received
is less than the carrying amount, the debit difference is offset against reserves.
(iv) Derecognition
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows
from the financial asset expire or the financial asset is transferred to another party without retaining control or
substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the
carrying amount and the sum of the consideration received (including any new asset obtained less any new liability
assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is
discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying
amount of the financial liability extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Notes To The Financial Statements
(cont’d)