BERJAYA FOOD BERHAD ANNUAL REPORT

2017

The accounting concept that applied in this financial statement

is historical cost, going concern and consistency.

Going Concern
Going Concern is a concept used in business and accounting
to describe the fiscal health of a company.
Going concern is an accounting term for a company that has the
business entityis assumed to operating indefinitely that means it
will continue perpetually until it provides evidence to the
contrary. Therefore, assets acquired by the business of this
company are recorded at their original costs, not valued based
on their ‘break up’ or diposal values.This accounting term
means that a company's ability to have enough fund to stay float
or prevent the company from bankruptcy. If a business is not
using this term of going concern, it means it will maybe face
bankrupt and its assets were liquidated. 
1) The directors of Berjaya Food Berhad prepared a financial
statement that in annual report of the Group and the Company
under the term of going concern (reference page 45). As at the
30 April 2017. the net current liabilities of the Group and the
Company was RM187,199,000 while 2016:RM 84,724,000) and
RM 42,471,000. As shown above, they face the problem of
liabilities. Hence, they use the term going concern to produce
enough cash flows from operations and refinance its short term
borrowings to meet their responsibilities.
2) Liquidity risk (reference page 115, 116). This is the risk of
the Company and Group will face problem when meet the
financial obilgations because of the shortage of funds. Besides,
the liquidity risk of group will rise when matching the wrong
financial assets and liabilities with each other. The group’s
primarily obejective is to maintain the balance between
continuity of funding and flexibility of using the stand-by credit
facilities. In addition, this Berjaya Food Berhad arrange its debt
maturity profile correctly, manage cash flows and make sure the
availability of funds to ensure refinancing, repayment and
funding needs are met. Apart from that, this group’s liquidity
management it retain enough level of cash and look for supplier
and vendors to meet the capital demands.
3) The directors of the company are responsible prepare a
financial statement of this group and company that provide a
good view accoding to the requirements of Malaysian Financial
Reporting Standards, International Financial Reporting
Standards and the Companies Act 2016in Malaysia. Besides, the
directors will ensure the financial statement that provide is
confirmly not mistake and 100% no wrong. Hence, after pass to
the auditors, they will check is this company can continue as
going concern its business for following one year of an audit.

Page 116 shown financial risk management objectives and

policies (continued)
Hence, if using this concept can prevent this company bankrupt
and its assets were liquidated. Accountant of Berjaya Food
Berhad use the going concern principle to report the financial
statement. Normally, this company prefer that reporting long-
term assets until a suitable timing.For example, annual report
that is from year to year.