Maxis Berhad | Annual Report 2013

Maxis Berhad | Annual Report 2013 86 2 BASIS OF PREPARATION (CONTINUED) (b) Standards, amendments to published standards and IC Interpretations to existing standards that are applicable to the Group and the Company but not yet effective (continued) The Group and the Company will apply the new standards, amendments to published standards and IC Interpretations to existing standards in the following periods: (continued) (ii) Financial year beginning on or after 1 January 2014 (continued) • Amendments to MFRS 139 “Financial Instruments: Recognition and Measurement” (effective from 1 January 2014) provide relief from discontinuing hedge accounting in a situation where a derivative (which has been designated as a hedging instrument) is novated to effect clearing with a central counterparty as a result of laws or regulation, if specific conditions are met. This amendment is not expected to have significant impact on the financial results and position of the Group and of the Company. • IC Interpretation 21 “Levies” (effective from 1 January 2014) sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation clarifies that a liability to pay a levy is recognised when the obligating event occurs. Obligating event is the event identified by the legislation that triggers the payment of the levy. This interpretation is not expected to have significant impact on the financial results and position of the Group and of the Company. (iii) Financial year beginning on or after 1 January 2015 • MFRS 9 “Financial Instruments - Classification and Measurement of Financial Assets and Financial Liabilities” (effective from 1 January 2015) replaces the parts of MFRS 139 that relate to the classification and measurement of financial instruments. MFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the MFRS 139 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the statement of profit or loss, unless this creates an accounting mismatch. The Group and the Company are currently assessing the MFRS 9’s full impact including the remaining phases of MFRS 9. 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items that are considered material in relation to the financial statements. Certain comparative information has been reclassified to conform with the current financial year’s presentation as disclosed in Note 37 to the financial statements. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by- acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013 Continued