Serba Dinamik Annual Report 2018

182 ANNUAL REPORT 2018 SERBA DINAMIK HOLDINGS BERHAD 1. Basis of preparation (continued) (a) Statement of compliance (continued) MFRS / Amendment / Interpretation Effective date IC Interpretation 23, Uncertainty over Income Tax Treatments 1 January 2019 Amendments to MFRS 3 , Business Combinations (Annual improvement to MFRS Standards 2015-2018 Cycle) 1 January 2020 Amendments to MFRS 101 , Presentation of Financial Statements and MFRS 108 , Accounting Policies, Changes in Accounting Estimates and Errors - Definition of Material 1 January 2020 MFRS 17, Insurance Contracts 1 January 2021 Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture To be determined The Group and the Company plan to apply the abovementioned accounting standards, interpretations and amendments: • from the annual period beginning on 1 January 2019 for those accounting standards, interpretations and amendments that are effective for annual periods beginning on or after 1 January 2019. • from the annual period beginning on 1 January 2020 for those accounting standards, interpretations and amendments that are effective for annual periods beginning on or after 1 January 2020. The Group and the Company do not plan to apply MFRS 17, Insurance Contracts that is effective for annual periods beginning on 1 January 2021 as it is not applicable to the Group and the Company. The initial application of the accounting standards, interpretations or amendments are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company except as mentioned below: MFRS 16, Leases MFRS 16 replaces the guidance in MFRS 117, Leases, IC Interpretation 4, Determining whether an Arrangement contains a Lease, IC Interpretation 115, Operating Leases - Incentives and IC Interpretation 127, Evaluating the Substance of Transactions Involving the Legal Form of a Lease. MFRS 16 introduces a single, on balance sheet lease accounting model for lessees. A lessee recognises a right-of- use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard which continues to be classifies as finance or operating lease. The adoption of MFRS 16 will result in a change in accounting policy. Based on the assessment, the Group and the Company do not expect the application of MFRS 16 to have a significant impact on its consolidated financial statements. N O T E S T O T H E F I N A N C I A L S TAT E M E N T