4) SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Accounting
The financial statements are prepared under the historical cost convention unless otherwise
indicated in the accounting policies below. Historical cost is generally based on the fair
value of the consideration given in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date, regardless
of whether that price is directly observable or estimated using another valuation technique.
In estimating the fair value of an asset or a liability, the Group takes into account the
characteristics of the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
(i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities that the entity can access at the measurement date;
(ii) Level 2 are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
(iii) Level 3 inputs are unobservable inputs for the asset or liability.
b) Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the
transaction will flow to the enterprise and the amount of the revenue can be measured
reliably. Revenue is measured at the fair value of consideration received or receivable,
net of returns, allowances and trade discounts.
Revenue from services are recognised when services are rendered. Revenue represents
the invoiced value of services rendered net of discounts and allowances. Interest income
is recognised on accrual basis.
c) Foreign Currency Conversion
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group are measured using
the currency of the primary economic environment in which the entity operates (”the
functional currency”). The consolidated financial statements are presented in Ringgit
Malaysia (RM), which is also the Company’s functional currency.
Asia Media Group Berhad Annual Report 2014
83
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)
