NOTES TO FINANCIAL STATEMENTS
December 31, 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
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currently available in FRS 39. Under FRS 109, greater flexibility has been introduced to the types of
transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for
hedging instruments and the types of risk components of non-financial items that are eligible for hedge
accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an
‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced
disclosure requirements about an entity’s risk management activities have also been introduced.
Management anticipates that the initial application of the new FRS 109 may not result in any material changes to
the accounting policies relating to financial instruments. Additional disclosures may be made with respect of trade
and other receivables, including any significant judgement and estimation made. Management has commenced an
assessment of the possible impact of implementing FRS 109. It is currently impracticable to disclose any further
information on the known or reasonably estimable impact to the Group’s financial statements in the period of initial
application as the management has yet to complete its detailed assessment. Management does not plan to early adopt
the new FRS 109.
FRS 115
Revenue from Contracts with Customers
InNovember 2014, FRS 115was issuedwhich establishes a single comprehensivemodel for entities touse in accounting
for revenue arising from contracts with customers. FRS 115 will supersede the current revenue recognition guidance
including FRS 18
Revenue
, FRS 11
Construction Contracts
and the related Interpretations when it becomes effective.
The core principle of FRS 115 is that an entity should recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:
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Under FRS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control”
of the goods or services underlying the particular performance obligation is transferred to the customer. Far more
prescriptive guidance has been added in FRS 115 to deal with specific scenarios. Furthermore, extensive disclosures
are required by FRS 115.
Management anticipates that the initial application of the new FRS 115 may not result in material changes to the
accounting policies relating to revenue recognition. Additional disclosures will be made with respect of revenue
and deferred revenue, including information about contracts with customers, contract balances and performance
obligation. Management has commenced an assessment of the possible impact of implementing FRS 115. It is
currently impracticable to disclose any further information on the known or reasonably estimable impact to the
Group’s financial statements in the period of initial application as the management has yet to complete its detailed
assessment. The management does not plan to early adopt the new FRS 115.
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