FRENCKEN GROUP LIMITED
ANNUAL REPORT 2015
53
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Basis of preparation (Cont’d)
Amendments to FRS 1
Presentation of Financial Instruments: Disclosure Initiative
The amendments have been made to the following:
• Materiality and aggregation - An entity shall not obscure useful information by aggregating or disaggregating
information and materiality considerations apply to the primary statements, notes and any specific disclosure
requirements in FRSs.
• Balance sheet, income statement and statement of comprehensive income - The list of line items to be
presented in these statements can be aggregated or disaggregated as relevant. Guidance on subtotals in
these statements has also been included.
• Notes - Entities have flexibility when designing the structure of the notes and guidance is introduced on how
to determine a systematic order of the notes. In addition, unhelpful guidance and examples with regard to
the identification of significant accounting policies are removed.
The management is currently evaluating the potential impact of the application of Amendments to FRS 1
Presentation of Financial Instruments: Disclosure Initiative
on the financial statements of the Group and of the
Company in the period of initial application.
Amendments to FRS 16
Property, Plant and Equipment
and FRS 38
Intangible Assets: Clarification of Acceptable
Methods of Depreciation and Amortisation
The amendments to FRS 16 prohibit entities from using a revenue-based depreciation method for items of
property, plant and equipment. The amendments to FRS 38 introduce a rebuttable presumption that revenue is
not an appropriate basis for amortisation of an intangible asset. This presumption can only be rebutted in the
following two limited circumstances:
a) when the intangible asset is expressed as a measure of revenue; or
b) when it can be demonstrated that revenue and consumption of the economic benefits of the intangible asset
are highly correlated.
The management is currently evaluating the potential impact of the application of Amendments to FRS 16
Property, Plant and Equipment
and FRS 38
Intangible Assets: Clarification of Acceptable Methods of Depreciation
and Amortisation
on the financial statements of the Group and of the Company in the period of initial application.
(b) Group accounting
Subsidiaries
(i)
Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• Has power over the investee;
• Is exposed, or has rights, to variable returns from its involvement with the investee; and
• Has the ability to use its power to affect its returns.
