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Notes to the
financial statements
For the financial year ended 31 December 2018
74
B A K E R T E C H N O L O G Y
L I M I T E D
2.
Summary of significant accounting policies (cont’d)
2.2
First-time adoption of Singapore Financial Reporting Standards (International) (SFRS(I))
(cont’d)
Exemptions applied on adoption of SFRS(I)
SFRS(I) allows first-time adopters exemptions from the retrospective application of certain
requirements under SFRS(I). The Group has applied the following exemption:
•
The comparative information do not comply with SFRS(I) 9 Financial Instruments or SFRS(I)
7 Financial Instruments: Disclosures to the extent the disclosures relate to items within the
scope of SFRS(I) 9.
New accounting standards effective on 1 January 2018
The accounting policies adopted are consistent with those previously applied under FRS except
that in the current financial year, the Group has adopted all the SFRS(I) which are effective for
annual financial periods beginning on or after 1 January 2018. Except for the impact arising from the
exemption applied as described above and the adoption of SFRS(I) 9 described below, the adoption
of these standards did not have any material effect on the financial performance or position of the
Group and the Company.
SFRS(I) 9
Financial Instruments
On 1 January 2018, the Group adopted SFRS(I) 9 Financial instruments, which is effective for annual
periods beginning on or after 1 January 2018.
The changes arising from the adoption of SFRS(I) 9 have been applied retrospectively. The Group
has elected to apply the exemption in SFRS(I) 1 and has not restated comparative information in the
year of initial application. The impact arising from SFRS(I) 9 adoption was included in the opening
retained earnings at the date of initial application, 1 January 2018. The comparative information was
prepared in accordance with the requirements of FRS 39.
Classification and measurement
SFRS(I) 9 requires all equity instruments to be carried at fair value through profit or loss, unless an
entity chooses on initial recognition, to present fair value changes in other comprehensive income.
The Group elects to measure its unquoted equity securities at fair value through other comprehensive
income (“FVOCI”), previously classified as available-for-sale (“AFS”).
The Group currently measures one of its investments in unquoted equity securities at cost. Upon
adoption of SFRS(I) 9, the Group measures the unquoted equity securities at FVOCI. The impact
arising from this change resulted in an increase in carrying value of $734,000 to the unquoted equity
securities with a corresponding adjustment to fair value adjustment reserve as at 1 January 2018.
Impairment under expected credit loss (“ECL”) model
The Group’s accounting policy of impairment under ECL model is disclosed in Note 2.14.