46
JUMBO GROUP LIMITED
Notes to the Combined
Financial Statements
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or
liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions
that are within the scope of FRS 17, and measurements that have some similarities to fair value but are not fair value, such as net
realisable value in FRS 2 or value in use in FRS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which
the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either
directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
ADOPTION OF NEW AND REVISED STANDARDS – On 1 October 2014, the Group adopted all the new and revised FRSs and
Interpretations of FRS (“INT FRS”) that are effective from that date and are relevant to its operations. The adoption of these new/revised
FRSs and INT FRSs and amendments to FRSs does not result in changes to the Group’s and Company’s accounting policies and has no
material effect on the amounts reported for the current or prior years.
At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRS that are relevant to the
Group and the Company were issued but not effective:
FRS 109 Financial Instruments
(2)
FRS 115 Revenue from Contracts with Customers
(2)
Amendments to FRS 1 Presentation of Financial Statements: Disclosure Initiative
(1)
(1)
Applies to annual periods beginning on or after 1 January 2016, with early application permitted.
(2)
Applies to annual periods beginning on or after 1 January 2018, with early application permitted.
Consequential amendments were also made to various standards as a result of these new/revised standards.
The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in future periods will not have
a material impact on the financial statements of the Group and of the Company in the period of their initial adoption except for the
following:
FRS 109
Financial Instruments
FRS 109 Financial Instruments issued in December 2014 replaces FRS 39 Financial Instrument introduced new requirements for the
classification and measurement of financial instruments, as well as a new impairment model for financial assets. In addition, it also sets
out new requirements for general hedge accounting.
Key requirements of FRS 109:
all recognised financial assets that are within the scope of FRS 39
Financial Instruments
:
Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt
investments that are held within a business model whose objective is to collect the contractual cash flows, and that have
contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured
at amortised cost at the end of subsequent accounting periods. Debt instruments that are held within a business model whose
objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding, are measured at fair value through other comprehensive income (“FVTOCI”). All other debt investments and
equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under FRS 109,
entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not
held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.
