notes to the financial statements 31 march 2025 (cont’d.) 2. Summary of material accounting policies (cont'd.) 2.4 Financial instruments (i) Financial assets A financial instrument is any contract that gives rise to a financial asset of one enঞty and a financial liability or equity instrument of another enঞty. Initial recognition and measurement Financial assets of the Group are classified, at iniঞal recogniঞon, and subsequently measured at amorঞsed cost and fair value through profit or loss whilst all financial assets of the Company are measured at amorঞsed cost. Impairment of financial assets The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximaঞon of the original effecঞve interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For trade receivables and contract assets, the Group applies a simplified approach in calculaঞng ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifeঞme ECLs at each reporঞng date. The Group has performed its assessment based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. In making this assessment, the Group also takes into consideraঞon that it would maintain its name as the registered owner of the properঞes unঞl full selement is made by the purchasers or the purchasers’ end- financiers. (ii) Financial liabilities Initial recognition and measurement Financial liabiliঞes of the Group and the Company are classified, at iniঞal recogniঞon, as financial liabiliঞes at amorঞsed cost. 2.5 Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries (collecঞvely the "Group") at the reporঞng date. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Company controls an investee if, and only if, the Company has all of the following: (i) Power over the investee (i.e. exisঞng rights that give it the current ability to direct the relevant acঞviঞes of the investee); (ii) Exposure, or rights, to variable returns from its investment with the investee; and (iii) The ability to use its power over the investee to affect its returns. 165 MATRIX CONCEPTS HOLDINGS BERHAD INTEGRATED ANNUAL REPORT 2025 07 FINANCIAL STATEMENTS
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