Annual Report 2019

China Merchants China Direct Investments Limited Annual Report 2019 82 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2019 2. APPLICATION OF AMENDMENTS AND INTERPRETATION TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (CONTINUED) Amendments to HKFRSs in issue but not yet effective (continued) Amendments to HKAS 1 and HKAS 8 Definition of Material The amendments provide refinements to the definition of material by including additional guidance and explanations in making materiality judgments. In particular, the amendments: ‧ include the concept of “obscuring” material information in which the effect is similar to omitting or misstating the information; ‧ replace threshold for materiality influencing users from “could influence” to “could reasonably be expected to influence”; and ‧ include the use of the phrase “primary users” rather than simply referring to “users” which was considered too broad when deciding what information to disclose in the financial statements. The amendments also align the definition across all HKFRSs and will be mandatorily effective for the Group’s annual period beginning on 1 January 2020. The application of the amendments is not expected to have significant impact on the financial position and performance of the Group but may affect the presentation and disclosures in the consolidated financial statements. Conceptual Framework for Financial Reporting 2018 (the “ New Framework ”) and the Amendments to References to the Conceptual Framework in HKFRS Standards The New Framework: ‧ reintroduces the terms stewardship and prudence; ‧ introduces a new asset definition that focuses on rights and a new liability definition that is likely to be broader than the definition it replaces, but does not change the distinction between a liability and an equity instrument; ‧ discusses historical cost and current value measures, and provides additional guidance on how to select a measurement basis for a particular asset or liability; ‧ states that the primary measure of financial performance is profit or loss, and that only in exceptional circumstances other comprehensive income will be used and only for income or expenses that arise from a change in the current value of an asset or liability; and ‧ discusses uncertainty, derecognition, unit of account, the reporting entity and combined financial statements.