Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 74 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) The Group has assessed the effects of applying the new standard on the Group’s financial statements and has identified the following areas: (cont’d) • The Group does not expect any material impact to the basis of recognition for its sale of production services and revenue from content sales. • The Group intends to adopt the standard using modified retrospective approach which means that the cumulative impact to the adoption will be recognised in retained earnings as of 1 January 2018 and that comparatives will not be restated. (iii) MFRS 16 Leases MFRS 16, which upon the effective date will supersede MFRS 117 Leases , introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Specifically, under MFRS 16, a lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Accordingly, a lessee should recognise depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows. Also, the right-of-use asset and the lease liability are initially measured on a present value basis. The measurement includes non-cancellable lease payments and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease. This accounting treatment is significantly different from the lessee accounting for leases that are classified as operating leases under the predecessor standard, MFRS 117. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2017 (cont’d)