Page 136 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

(c) cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks which
have an insignificant risk of changes in fair value with original maturities of three months or less,
and are used by the SC in the management of their short term commitments. For the purpose
of the statement of cash flows, cash and cash equivalents are presented net of restricted
deposits.

(d) Impairment

(i) Financial assets

Unless specifically disclosed below, the SC generally applied the following accounting
policies retrospectively. Nevertheless, as permitted by MFRS 9, Financial Instruments, the
SC elected not to restate the comparatives.

current financial year

The SC recognises loss allowances for expected credit losses on financial assets measured
at amortised cost. Expected credit losses are a probability-weighted estimate of credit
losses.

The SC measures loss allowances at an amount equal to lifetime expected credit loss,
except for debt securities that are determined to have low credit risk at the reporting
date, cash and cash equivalents for which credit risk has not increased significantly since
initial recognition, which are measured at 12-month expected credit loss. Loss allowances
for trade receivables are always measured at an amount equal to lifetime expected credit
loss.

When determining whether the credit risk of a financial asset has increased significantly
since initial recognition and when estimating expected credit loss, the SC considers
reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based
on the SC’s historical experience and informed credit assessment and including forward-
looking information, where available.
Lifetime expected credit losses are the expected credit losses that result from all possible
default events over the expected life of the asset, while 12-month expected credit losses
are the portion of expected credit losses that result from default events that are possible
within the 12 months after the reporting date. The maximum period considered when
estimating expected credit losses is the maximum contractual period over which the SC
is exposed to credit risk.

The SC estimated the expected credit losses on trade receivables using a provision matrix
with reference to historical credit loss experience.

An impairment loss in respect of financial assets measured at amortised cost is recognised
in profit or loss and the carrying amount of the asset is reduced through the use of an
allowance account.

At each reporting date, the SC assesses whether financial assets carried at amortised cost
are credit impaired. A financial asset is credit impaired when one or more events that
have a detrimental impact on the estimated future cash flows of the financial asset have
occurred.

126 | PART 5 »» STATEMENTS, STATiSTiCS ANd ACTiviTiES

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