Maybank Performance Outlook FY2019
Financial Statements Impact Arising from MFRS 16 Adoption
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MFRS 16 Adoption (effective 1 January 2019)
MFRS 16 replaces existing accounting standard MFRS 117
MFRS 16 eliminates the distinction between operating and finance leases for all lessees
Under MFRS 16, a lessor's accounting is substantially unchanged; the main impact is on a lessee
On its balance sheet, a lessee will now present a liability representing its obligation to make
rental payment to the asset owner while recognising a corresponding asset representing its right
to control the use of another's asset to generate income
ā
Balance Sheet Change
Recognition of:
Right-of-use (ROU) assets
Lease liabilities at the present value of future
lease payments
However, short-term and low value leases are
exempted from the treatment above
Impact to Lessee: Balance sheet will show an increase
in both assets and liabilities.
ā
Income Statement Change
Lease rental expenses replaced by:
interest from amortisation of the lease liability
depreciation of the ROU asset
Impact to Lessee: A lease now has a front-loaded
expense profile that gradually tapers off towards the
end of the lease term compared with the previous
accounting treatment of a straight-line expense profile
over the lease term.
Initial Finding: Impact to Maybank Group's capital ratios is expected to be minimal <10 bps for Day 1 adjustment on 1
January 2019. The final impact is still being assessed and is subject to further refinement.
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