My EG Services Berhad Annual Report 2019

MY E.G. SERVICES BERHAD [Registration No. 200001003034 (505639-K)] 202 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2019 (CONT’D) 54. CHANGES IN ACCOUNTING POLICIES (CONT’D) Initial Application of MFRS 9 (cont’d) The Group The Company Classification and Carrying Amount Under MFRS 139 Under MFRS 9 Transition Adjustment Under MFRS 139 Under MFRS 9 Transition Adjustment RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 (b) Reclassification from a v a i l a b l e - f o r - s a l e financial assets to fair value through profit or loss The Group’s short t e rm i nves tmen t s have been reclassified from available-for-sale financial assets to fair value through profit or loss as their cash flows do not represent solely payments of principal and interest. AFS 21,102 FVPL 21,102 - AFS 517 FVPL 517 - AFS ~ Available-for-sale financial asset FVOCI ~ Fair value through other comprehensive income financial assets FVPL ~ Fair value through profit or loss financial asset (c) The Group has changed its impairment loss methodology from the ‘incurred loss’ approach to the ‘expected credit loss’ approach upon the adoption of MFRS 9. Under this new approach, the Group has accounted for the expected credit losses of its financial assets measured at amortised cost to reflect their changes in credit risk since initial recognition. Also, the Group has applied a simplified approach to measure the loss allowance of its receivables as permitted by MFRS 9. Initial Application of MFRS 16 The Group has adopted MFRS 16 using the modified retrospective approach under which the cumulative effect of initial application is recognised as an adjustment to the retained profits as at 1 October 2018 (date of initial application) without restating any comparative information. The Group has applied MFRS 16 only to contracts that were previously identified as leases under MFRS 117 ‘Leases’ and IC Interpretation 4 ‘Determining Whether an Arrangement Contains a Lease’. Therefore, MFRS 16 has been applied only to contracts entered into or changed on or after 1 October 2018. (a) Lessee Accounting At 1 October 2018, for leases that were classified as operating leases under MFRS 117, the Group measured the lease liabilities at the present value of the remaining lease payments, discounted using the Group’s incremental borrowing rate at that date ranging from 4.35% to 5.72%. The right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease. The right-of-use assets were measured at their carrying amount as if MFRS 16 had been applied since the commencement date, discounted using the Group’s incremental borrowing rate at 1 October 2018.