Maxis Berhad
Annual Report 2014
108
Notes to the
Financial Statements
31 December 2014
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Borrowings
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised
as part of the cost of the assets. Other borrowing costs are recognised as an expense in the statement of profit or loss when
incurred.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it relates.
Interest expense, redeemable preference shares dividends, losses and gains relating to a financial instrument, or a component
part, classified as a liability is reported within finance cost in the statement of profit or loss.
Borrowings are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement
of the liability for at least 12 months after the end of the reporting period.
(i) Borrowings in a designated hedging relationship
Borrowings subject to cash flow hedges are recognised initially at fair value based on the applicable spot price plus any
transaction costs that are directly attributable to the issue of borrowing. These borrowings are subsequently carried at
amortised costs, translated at applicable spot exchange rate at reporting date. Any difference between the final amount paid
to discharge the borrowing and the initial proceeds is recognised in the statement of profit or loss over the borrowing period
using the effective interest method.
Currency gains or losses on the borrowings are recognised in the statement of profit or loss, along with the associated gains
or losses on the hedging instrument, which have been reclassified from the cash flow hedging reserve to the statement of
profit or loss.
(ii) Borrowings not in a designated hedging relationship
Borrowings not in a designated hedging relationship are initially recognised at fair value plus transaction costs that are directly
attributable to the issue of borrowing. These borrowings are subsequently carried at amortised costs. Any difference between
the final amount paid to discharge the borrowing and the initial proceeds is recognised in the statement of profit or loss over
the borrowing period using the effective interest method.
(p) Provisions for liabilities and charges
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can
be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
