52

Notes To The Financial Statements

VITROX CORPORATION BERHAD

[649966-K]

For The Financial Year Ended 31 December 2008

2.

SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.1 Basis of Preparation of Financial Statements (Cont’d)

The Group and the Company have not applied the following FRSs and IC Interpretations which have been issued as at the

balance sheet date but are not yet effective:-

Effective for financial periods

Standard/Interpretation

beginning on or after

FRS 4 Insurance Contracts

1 January 2010

FRS 7 Financial Instruments: Disclosures

1 January 2010

FRS 8 Operating Segments

1 July 2009

FRS 139 Financial Instruments: Recognition and Measurement

1 January 2010

IC Interpretation 9 Reassessment of Embedded Derivatives

1 January 2010

IC Interpretation 10 Interim Financial Reporting and Impairment

1 January 2010

FRS 4 and IC Interpretation 9 will not be applicable to the Group and the Company. The adoption of FRS 8 and IC

Interpretation 10 is not expected to have any significant impacts on the financial statements. By virtue of the exemptions

given by FRS 7 and FRS 139, the impacts on the financial statements upon initial application of these FRSs are not disclosed.

2.2 Basis of Consolidation

A subsidiary is an entity that is controlled by the Group. Control is the power to govern the financial and operating policies

of the entity so as to obtain benefits from its activities.

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries made up

to the end of the financial year using the purchase method. The results of the subsidiary acquired or disposed of during

the financial year are included in the consolidated financial statements from the date of acquisition or up to the date of

disposal. Intragroup balances, transactions, income and expenses are eliminated in full on consolidation.

The excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and

contingent liabilities of the subsidiary acquired at the acquisition date represents goodwill. Goodwill is recognised as an

asset at cost less accumulated impairment losses, if any. When the Group’s interest in the net fair value of the identifiable

assets, liabilities and contingent liabilities of the subsidiary acquired at the acquisition date exceeds the cost of acquisition,

the excess (hereinafter referred to as “negative goodwill”), after reassessment, is recognised in the income statement.

2.3 Financial Instruments

Recognised Financial Instruments

The accounting policies for recognised financial instruments are disclosed in the individual policies associated with each

item.

Unrecognised Financial Instruments

The Group and the Company do not have any unrecognised financial instruments other than the contingent liabilities as

disclosed in Note 24 to the financial statements.