Notes to the Financial Statements - Cahaya Mata Sarawak Bhd

Notes to the Financial Statements
For the fi nancial year ended 31 December 2011
2. Summary of signifi cant accounting policies (contd.)
2.2 Changes in accounting policies (contd.)
Adoption of the above FRS and IC Interpretations did not have any effect on the fi nancial performance or
position of the Group or of the Company except for those discussed below:
Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial
Statements
The adoption of the two revised standards affects the way in which the Group accounts for business
combinations and the preparation of its consolidated fi nancial statements. Under the revised FRS 3, all
acquisition-related costs are recognised as an expense in the statement of comprehensive income in
the period in which they are incurred. All considerations transferred, including contingent considerations,
are measured at fair value as at the acquisition date. Any equity interests held prior to the date control
is obtained is remeasured at fair value, with the resulting gains or losses recognised in the statement
of comprehensive income. There is now an option on a case to case basis to measure non-controlling
interests either at fair value or at the non-controlling interests’ proportionate share of the net identifi able
assets of the assets acquired.
Goodwill arising from the business combination is measured as the difference between the aggregate
fair value of consideration transferred, any non-controlling interests in the acquiree and the fair value at
acquisition date of any previously-held equity interest in the acquiree, and the fair value of identifi able
assets acquired and liabilities assumed (including contingent liabilities) at acquisition date.
The revised FRS 127 requires that changes in ownership interest which do not result in a loss of control
be accounted for as equity transactions, instead of in the statement of comprehensive income. Where
changes in ownership interest results in loss of control, any remaining interest in the entity is remeasured at
fair value and any resulting gains or losses is recognised in the statement of comprehensive income. Total
comprehensive income will be proportionately allocated to non-controlling interests, even if it results in the
non-controlling interests being in a defi cit position.
The revised FRS 3 and FRS 127 apply prospectively to acquisitions occurring on or after 1 January 2011.
For the acquisitions of Samalaju Property Development Sdn. Bhd. on 1 January 2011 as well as CMS Roads
Sdn. Bhd. and CMS Pavement Tech Sdn. Bhd. on 28 February 2011, the Group has chosen to measure
the non-controlling interests in the acquiree at the non-controlling interest’s proportionate share of the
acquiree’s net assets.
Amendments to FRS 7: Improving Disclosures about Financial Instruments
The amended standard requires enhanced disclosure about fair value measurement and liquidity risk.
Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs
using a three level fair value hierarchy (Level 1, Level 2 and Level 3), by class, for all fi nancial instruments
recognised at fair value. A reconciliation between the beginning and ending balance for Level 3 fair value
measurements is required. Any signifi cant transfers between levels of the fair value hierarchy and the
reasons for those transfers need to be disclosed. The amendments also clarify the requirements for liquidity
risk disclosures with respect to derivative transactions and assets used for liquidity management. The fair
value measurement disclosures are presented in Note 42. The liquidity risk disclosures are not signifi cantly
impacted by the amendments and are presented in Note 43(b).
Annual Report 2011 83