My EG Services Berhad Annual Report 2020

ANNUAL REPORT 2020 159 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 4.22 REVENUE FROM OTHER SOURCES AND OTHER OPERATING INCOME Interest Income Interest income is recognised on an accrual basis using the effective interest method. 4.23 DEFERRED REVENUE The deferred revenue primarily relate to advance considerations received from customers for the rental of devices and advanced billings for other maintenance, advertising, and marketing services of which the revenue will be recognised over the remaining contract term of the specific contract it relates to. 4.24 OPERATING SEGMENTS An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. 4.25 EARNINGS PER ORDINARY SHARE Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held. Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares. 4.26 JOINT ARRANGEMENTS Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements returns. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint Ventures A joint venture is a joint arrangement whereby the Group has rights only to the net assets of the arrangement. Investments in joint ventures are stated at cost in the statement of financial position of the Company and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investment includes transaction costs. The investment in a joint venture is accounted for in the consolidated financial statements using the equity method, based on the financial statements of the joint venture made up to 31 December 2020. The Group’s share of the post acquisition profits and other comprehensive income of the joint venture is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, from the date that joint control commences up to the effective date when the investment ceases to be a joint venture or when the investment is classified as held for sale. The Group’s investment in the joint venture is carried in the consolidated statement of financial position at cost plus the Group’s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs.