Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 73 2. Basis of Preparation (cont’d) (a) Statement of compliance (cont’d) Standards issued but not yet effective (cont’d) (ii) MFRS 15 Revenue from Contracts with Customers (cont’d) Key provisions of the new standard are as follows: • Any bundled goods or services that are distinct must be separately recognised, and any discounts or rebates on the contract price must generally be allocated to the separate elements. • If the consideration varies (such as for incentives, rebates, performance fees, royalties, success of an outcome etc), minimum amounts of revenue must be recognised if they are not at significant risk of reversal. • The point at which revenue is able to be recognised may shift: some revenue which is currently recognised at a point in time at the end of a contract may have to be recognised over the contract term and vice versa. • There are new specific rules on licenses, warranties, non-refundable upfront fees, and consignment arrangements to name a few. • As with any new standard, there are also increased disclosures. The Group has assessed the effects of applying the new standard on the Group’s financial statements and has identified the following areas: • Accounting for multiple element arrangements in advertising contracts – where a contractual arrangement consists of two or more separate deliverables that have value to the customer on a stand-alone basis, revenue is recognised for each element as if it was an individual contract. Total contract consideration is allocated between separate deliverables based on their fair value. Identification of separate deliverables in relation to advertising contracts will affect the timing of the recognition of advertising revenue moving forward. Judgement is applied in both identifying separate deliverables and allocating the consideration between them. The impact is not expected to be material to the advertising revenue of the Group as majority of existing contracts have already incorporated these separation of deliverables into value attached to each deliverable. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2017 (cont’d)