Serba Dinamik Annual Report 2019

318 2019 ANNUAL REPORT FINANCIAL STATEMENTS SERBA DINAMIK HOLDINGS BERHAD 36. SIGNIFICANT CHANGES IN ACCOUNTING POLICIES (CONTINUED) 36.1 Impacts on financial statements (i) MFRS 16, Leases During the year, the Group and the Company adopted MFRS 16 using the modified retrospective approach. Accordingly, the comparative information presented for year 2018 has not been restated – i.e. it is presented, as previously reported under MFRS 117, Leases and related interpretations. The following table explains the difference between operating lease commitments disclosed applying MFRS 117 at 31 December 2018, and lease liabilities recognised in the statement of financial position at 1 January 2019. RM’000 Operating lease commitments at 31 December 2018 4,873 Discounted using the incremental borrowing rate at 1 January 2019 4,262 Finance lease liabilities recognised at 31 December 2018 11,288 Contractual payment for land use rights 140,572 __________ Lease liabilities recognised at 1 January 2019 156,122 ============ (ii) Amendments to MFRS 123, Borrowing Cost (Annual Improvements to MFRS Standards 2015-2017 Cycle) The Group has capitalised additional finance cost of RM20,197,598 into the cost of the qualifying assets during the financial year. 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 S