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JAYA TIASA HOLDINGS BERHAD
Notes to the Financial Statements (cont’d)
for the financial year ended 30 June 2015
2.
Summary of significant accounting policies (cont’d)
2.20 Financial liabilities (cont’d)
(b) Other financial liabilities (cont’d)
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and
subsequently measured at amortised cost using the effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts
is recognised in profit or loss.
2.21 Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due.
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs.
Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over
the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when
it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability
is measured at the higher of the best estimate of the expenditure required to settle the present obligation at
the reporting date and the amount initially recognised less cumulative amortisation.
2.22 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the
activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing
costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended
use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs
consist of interest and other costs that the Group and the Company incurred in connection with the borrowing
of funds.
2.23 Employee benefits
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has
operations. The Malaysian companies in the Group make contributions to the Employees’ Provident Fund in
Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are
recognised as an expense in the period in which the related service is performed or capitalised as biological
assets as appropriate.
