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KUMPULAN FIMA BERHAD
(11817-V) |
Annual Report
2016
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Summary of Significant Accounting Policies (Cont’d)
(v) Fair Value Measurement (Cont’d)
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorised within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:
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Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities
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Level 2 — Other techniques for which all inputs that have a significant effect on the recorded
fair value are observable, either directly or indirectly
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Level 3 — Techniques that use inputs that have a significant effect on the recorded fair value
that are not based on observable market data
For assets and liabilities that are recognised in the financial statements on a recurring basis,
the Group and the Company determines whether transfers have occurred between Levels in the
hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each reporting period.
2.4 Significant Accounting Estimate and Judgement
Estimates, assumptions concerning the future and judgements are made in the preparation of the
financial statements. They affect application of the Group’s accounting policies, reported amounts of
assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going
basis and are based on experience and other relevant factors, including expectations of future events
that are believed to be reasonable under the circumstances.
Key Sources of Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below:
(i) Classification between investment properties and property, plant and equipment
The Group developed certain criteria in making judgement whether a property qualifies as an
investment property. Investment property is a property held to earn rentals or for capital appreciation
or both.
Some properties comprise a portion that is held to earn rentals or for capital appreciation
and another portion that is held for use in the production or supply of goods or services or for
administrative purposes. If these portions could be sold separately (or leased out separately under
a finance lease), the Group would account for the portions separately. If the portions could not be
sold separately, the property is an investment property only if an insignificant portion is held for
use in the production or supply of goods or services or for administrative purposes. Judgement is
made on an individual property basis to determine whether ancillary services are so significant that
a property does not qualify as investment property.