Page 119 - ar2010

117

notes to the

financial statements

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (cont’d)

3 BASIS OF PREPARATION

The fnancial statements of the Group and Company have been prepared in accordance with the provisions of the Companies Act, 1965 and Financial Reporting Standards, the MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities.

The fnancial statements have been prepared under the historical cost convention, as modifed by the revaluation of land and buildings and fair valuation of available-for-sale fnancial assets.

The preparation of fnancial statements in conformity with Financial Reporting Standards requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the fnancial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Group and Company’s accounting policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifcant to the fnancial statements are disclosed in Note 5 to the fnancial statements.

(a) Standards, amendments to published standards and interpretations that are applicable to the Group and are effective

The new accounting standards, amendments and improvements to published standards and interpretations that are effective for the

Group and Company’s fnancial year beginning on or after 1 January 2010 are as follows: • FRS 7 “Financial Instruments: Disclosures” and the related Amendments • FRS 8 “Operating Segments”

• FRS 101 (revised) “Presentation of Financial Statements” • FRS 123 “Borrowing Costs”

• FRS 139 “Financial Instruments: Recognition and Measurement” and the related Amendments

• Amendment to FRS 1 ‘‘First-time Adoption of Financial Reporting Standards’’ and FRS 127 “Consolidated and Separate Financial

Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate”

• Amendments to FRS 132 “Financial Instruments: Presentation” and FRS 101 (revised) “Presentation of Financial Statements” -

Puttable fnancial instruments and obligations arising on liquidation

• IC Interpretation 9 “Reassessment of Embedded Derivatives” and the related Amendments • IC Interpretation 10 “Interim Financial Reporting and Impairment” • IC Interpretation 11 “FRS 2 Group and Treasury Share Transactions” • IC Interpretation 13 “Customer Loyalty Programmes”

• IC Interpretation 14 “FRS 119 The Limit on a Defned Beneft Asset, Minimum Funding Requirements and Their Interaction” • Improvements to FRSs (2009)

A summary of the impact of the new accounting standards, amendments and improvements to published standards and interpretations

on the fnancial statements of the Group and Company is set out in Note 44.

(b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group but not yet

effective and have not been early adopted.

The Group will apply the following new standards, amendments to standards and interpretations from annual period beginning on

1 January 2011:

• The revised FRS 3 “Business combinations” (effective prospectively from 1 July 2010) continues to apply the acquisition method

to business combinations, with some signifcant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classifed as debt subsequently re-measured through proft or loss. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. These changes will impact the amount of goodwill recognised, reported results in the period that an acquisition occurs and future reported results.