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AirAsia X Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2014
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a)
Basis of preparation (continued)
On 27 January 2015, the Company had secured an additional term loan facility amounting to RM75 million for working capital purposes. In addition, as disclosed in
Note 33 to the financial statements, on 30 January 2015, the Company announced the proposal to undertake a renounceable rights issue of new ordinary shares of
RM0.15 each in AirAsia X Berhad together with free detachable warrants to raise gross proceeds of up to RM395 million (“Rights Issue with Warrants”). This corporate
transaction was approved by the shareholders at the Extraordinary General Meeting held on 27 March 2015. Certain shareholders (“Undertaking Shareholders”) have
provided irrevocable and unconditional written undertakings to subscribe and/or procure the subscription in full of their respective entitlements under the Rights Issue
with Warrants. In addition, the Company has also entered into an underwriting agreement with an underwriter to underwrite the remaining portion of the rights shares.
Proceeds from the rights issue are expected to be available in the second quarter of 2015.
Based on the above, the Directors believe that it is appropriate to prepare the financial statements of the Group and the Company on a going concern basis.
(b)
Standards, amendments to published standards and interpretations that are effective
The new accounting standards, amendments and improvements to published standards and interpretations that are effective for the Group and Company’s financial year
beginning on or after 1 January 2014 are as follows:
• Amendments to MFRS 132 ‘Offsetting Financial Assets and Financial Liabilities’
• Amendments to MFRS 136 ‘Recoverable Amount Disclosures for Non-Financial Assets’
• Amendments to MFRS 139 ‘Novation of Derivatives and Continuation of Hedge Accounting’
• Amendments to MFRS 10, MFRS 12 and MFRS 127 ‘Investment Entities’
(c)
Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group but not yet effective
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2014. None of these is
expected to have a significant effect on the consolidated financial statements of the Group, except the following set out below:
• Amendment to MFRS 11 ‘Joint arrangements’ (effective from 1 January 2016) requires an investor to apply the principles of MFRS 3 ‘Business Combination’
when it acquires an interest in a joint operation that constitutes a business. The amendments are applicable to both the acquisition of the initial interest in a
joint operation and the acquisition of additional interest in the same joint operation. However, a previously held interest is not re-measured when the acquisition
of an additional interest in the same joint operation results in retaining joint control.
• Amendments to MFRS 116 ‘Property, plant and equipment’ and MFRS 138 ‘Intangible assets’ (effective from 1 January 2016) clarify that the use of revenue-
based methods to calculate the depreciation and amortisation of an item of property, plant and equipment and intangible are not appropriate. This is because
revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in
the asset.
The amendments to MFRS 138 also clarify that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic
benefits embodied in an intangible asset. This presumption can be overcome only in the limited circumstances where the intangible asset is expressed as a
measure of revenue or where it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated.
• Amendments to MFRS 10 and MFRS 128 regarding sale or contribution of assets between an investor and its associate or joint venture (effective from 1
January 2016) resolve a current inconsistency between MFRS 10 and MFRS 128. The accounting treatment depends on whether the non-monetary assets sold
or contributed to an associate or joint venture constitute a ‘business’. Full gain or loss shall be recognised by the investor where the non-monetary assets
constitute a ‘business’. If the assets do not meet the definition of a business, the gain or loss is recognised by the investor to the extent of the other investors’
interests. The amendments will only apply when an investor sells or contributes assets to its associate or joint venture. They are not intended to address
accounting for the sale or contribution of assets by an investor in a joint operation.
