2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Standards and amendments that have been issued but not yet effective (continued)
• Amendments to MFRS 101 ‘Disclosure Initiatives’ (effective from 1 January 2016). The amendments to MFRS 101
include narrow-focus improvements in the following five areas:
(a) Materiality
(b) Disaggregation and subtotals
(c) Notes structure
(d) Disclosure of accounting policies
(e) Presentation of items of other comprehensive income arising from equity accounted investments
• MFRS 9 ‘Financial Instruments’ (effective from 1 January 2018) will replace MFRS 139 "Financial Instruments:
Recognition and Measurement".
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary
measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through
other comprehensive income ("OCI"). The basis of classification depends on the entity's business model and the
cash flow characteristics of the financial asset. Investments in equity instruments are always measured at fair value
through profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided the
instrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it
to collect contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting
for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the
fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is
recorded in other comprehensive income rather than the income statement, unless this creates an accounting
mismatch.
MFRS 9 introduces an expected credit loss model on impairment for all financial assets that replaces the incurred
loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the
need for a trigger event to have occurred before credit losses are recognised.
• MFRS 15 ‘Revenue from Contracts with Customers’ (effective from 1 January 2018) replaces MFRS 118 ‘Revenue’
and MFRS 111 ‘Construction contracts’ and related interpretations. The standard deals with revenue recognition and
establishes principles for reporting useful information to users of financial statements about the nature, amount,
timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.
Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the
use and obtain the benefits from the good or service. The core principle in MFRS 15 is that an entity recognises
revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services.
The effects of the above amendments to published standards are currently being assessed by the Directors.
237
KPJ Healthcare Berhad
Annual Report
2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
