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On Top of Our Game 76
Financial Statements
Notes to Financial Statements
31 March 2014
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Commission
after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of
significant direct issue costs.
Pursuant to the Finance Circular Minute (“FCM”) No. 26/2008 on Capital Management Framework
(“CMF”), equity injection from the Government is recorded as share capital.
Other financial liabilities
Trade and other payables and amount are initially measured at fair value, net of transaction costs and are
subsequently measured at amortised cost, using the effective interest method, with interest expense
recognised on an effective yield basis.
Derecognition of financial liabilities
The Commission derecognises financial liabilities when, and only when, the Commission’s obligations are
discharged, cancelled or they expire.
(d) LEASES - Leases are classified as finance leases whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Commission as lessee
Rentals payable under operating leases are charged to income or expenditure on a straight-line basis
over the term of the relevant lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under
operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are
recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense
on a straight-line basis, except where another systematic basis is more representative of the time pattern
in which economic benefits from the leased asset are consumed.
Financial Statements
Notes to Financial Statements
31 March 2014
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Commission
after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of
significant direct issue costs.
Pursuant to the Finance Circular Minute (“FCM”) No. 26/2008 on Capital Management Framework
(“CMF”), equity injection from the Government is recorded as share capital.
Other financial liabilities
Trade and other payables and amount are initially measured at fair value, net of transaction costs and are
subsequently measured at amortised cost, using the effective interest method, with interest expense
recognised on an effective yield basis.
Derecognition of financial liabilities
The Commission derecognises financial liabilities when, and only when, the Commission’s obligations are
discharged, cancelled or they expire.
(d) LEASES - Leases are classified as finance leases whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Commission as lessee
Rentals payable under operating leases are charged to income or expenditure on a straight-line basis
over the term of the relevant lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under
operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are
recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense
on a straight-line basis, except where another systematic basis is more representative of the time pattern
in which economic benefits from the leased asset are consumed.
