Annual Report 2011 - The Malaysian Institute Of Certified Public ...

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President’s Statement Financial Statement91When an available-for-sale financial asset is impaired, the cumulative loss that had been recognisedin other comprehensive income is reclassified from equity and recognised in profit or loss as areclassification adjustment even though the financial asset has not been derecognised. The amountof cumulative loss that is reclassified is the difference between the acquisition cost (less any principalrepayment and amortisation) and current fair value, less any impairment loss on that financial assetpreviously recognised in profit or loss.Impairment losses recognised in profit or loss for an investment in an equity instrument classified asavailable-for-sale is not reversed through profit or loss. Increase in fair value, if any, subsequent to theimpairment loss, is recognised in other comprehensive income.If the fair value of a debt instrument classified as available-for-sale, increases in a subsequent period andthe increase can be objectively related to an event occurring after the impairment loss was recognised inprofit or loss, the impairment loss is reversed with the amount of the reversal is recognised in profit or loss.An amount of impairment loss in respect of financial assets carried at cost is measured as the differencebetween the carrying amount of the financial asset and the present value of estimated future cash flowsdiscounted at the current market rate of return for a similar financial asset. Such impairment losses arenot reversed in subsequent periods.Derecognition of a financial assetThe Institute derecognises a financial asset when, and only when, the contractual rights to the cash flowsfrom the financial asset expire or it transfers the financial asset without retaining control or substantiallyall the risks and rewards of ownership of the financial asset to another party.On derecognition of a financial asset in its entirety, the difference between the carrying amount and thesum of the consideration received and any cumulative gain or loss that had been recognised in othercomprehensive income is recognised in profit or loss.2.16 Financial LiabilitiesThe Institute recognises all financial liabilities in its statement of financial position when, and only when,the Institute becomes a party to the contractual provisions of the instruments.Classification and measurementFinancial liabilities are initially measured at fair value plus in the case of other financial liabilities, directlyattributable transaction costs.Financial liabilities are classified as either financial liabilities at fair value through profit or loss or otherfinancial liabilities.(a)Financial liabilities at fair value through profit or lossFinancial liabilities are classified at fair value through profit or loss when the financial liability iseither held for trading or it is designated as fair value through profit or loss upon initial recognition.A financial liability is classified as held for trading if:• it has been acquired principally for the purpose of repurchasing it in the near term; or• on initial recognition, it is part of a portfolio of identified financial instruments that the Institutemanages together and has a recent actual pattern of short-term profit-taking; or• it is a derivative that is not a financial guarantee contract or a designated and effective hedginginstrument.
92Financial StatementPresident’s StatementAfter initial recognition, financial liabilities at fair value through profit or loss are measured at fair valuewith any gains or losses arising from changes in fair value recognised in profit or loss. The net gainsor losses recognised in profit or loss do not include any exchange differences or interest paid on thefinancial liability. Exchange differences and interest expense on financial liabilities at fair value throughprofit or loss are recognised separately in profit or loss as part of other income or other expenses.Derivative liability that is linked to and must be settled by delivery of an unquoted equity instrumentwhose fair value cannot be reliably measured is measured at cost.(b)Other financial liabilitiesAll financial liabilities, other than those categorised as fair value through profit or loss aresubsequently measured at amortised cost using the effective interest method. Other financialliabilities of the Institute include fees in advance and payables.A gain or loss on other financial liabilities is recognised in profit or loss when the financial liabilitiesare derecognised and through the amortisation process.Derecognition of a financial liabilityA financial liability is derecognised when, and only when, the obligation specified in the contract isextinguished. When an existing financial liability is exchanged with the same lender on substantiallydifferent terms or the terms of an existing liability are substantially modified, they are accounted foras an extinguishment of the original financial liability and a new financial liability is recognised. Thedifference between the carrying amount of a financial liability extinguished or transferred to anotherparty and the consideration paid, including any non-cash assets transferred or liabilities assumed, isrecognised in profit or loss.3. CRITICAL ACCOUNTING JUDGEMENT AND KEY SOURCES OFESTIMATION UNCERTAINTYThe preparation of financial statements in conformity with the Financial Reporting Standards requiresCouncil to exercise its judgement in the process of applying the Institute’s accounting policies and whichmay have significant effects on the amounts recognised in the financial statements. It also requires theuse of accounting estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements and the results reportedfor the reporting period and that may have a significant risk of causing a material adjustment to the carryingamounts of assets and liabilities within the next financial year. Although these judgements and estimates arebased on the Council’s best knowledge of current events and actions, actual results may differ.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects only that period,or in the period of the revision and future periods if the revision affects both current and future periods.(a)Significant judgements in applying the Institute’s accounting policiesIn the process of applying the Institute’s accounting policies, which are described in Note 2, the Councilis of the opinion that any instances of application of judgement are not expected to have a significanteffect on the amounts recognised in the financial statements, apart from those involving estimationswhich are dealt with below.
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PROGRESS THROUGH PARTNERSHIPSAnnual
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02notice of 54th AGMnotice of annua
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