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THONG GUAN INDUSTRIES BERHAD

  • 1.

    Basis of preparation (Cont’d)

    • (a)

      Statement of compliance (Cont’d)

FRSs/Interpretations

Effective date

IC Interpretation 2, Members’ Shares in Co-operative Entities and Similar Instruments

1 July 2007

IC Interpretation 5, Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

1 July 2007

IC Interpretation 6, Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment

1 July 2007

IC Interpretation 7,Applying the Restatement Approach under FRS 129 Financial Reporting in Hyperinflationary Economies

1 July 2007

IC Interpretation 8, Scope of FRS 2

1 July 2007

The Group and the Company plan to apply the rest of the abovementioned FRSs and Interpretations which are applicable to the Group and the Company for the annual period beginning 1 January 2008 except for FRS 139, Financial Instruments: Recognition and Measurement which its effective date has yet to be announced.

The impact of applying FRS 139 on the financial statements upon first adoption as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed by virtue of the exemption given in FRS 139.103AB.

FRS 112 addresses the accounting treatment for income taxes. However, FRS 112 does not prescribe the accounting treatment for reinvestment allowance. In the current accounting policy for income taxes, reinvestment allowance is treated as the tax base of an asset.The Group have not yet determined whether this accounting policy needs to be changed.

The initial application of the FRSs and Interpretations applicable to the Group and the Company are not expected to have any material impact on the financial statements of the Group and of the Company.

(b)

Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2 to the financial statements.

(c)

Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency and all financial information is presented in RM.

(d)

Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements.

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