133 / 220
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NOTES TO THE FINANCIAL STATEMENTS
31 MARCH 2018
Kumpulan Fima Berhad (11817-V) •
Annual Report 2018
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(i)
Investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation or for
both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated.
Depreciation of investment properties is provided for on a straight-line basis to write-off the cost of the property to
its residual value over its estimated useful life, at the following annual rates:
Freehold building
2%
Leasehold building
2% to 3%
Leasehold land
Over lease period
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the
amount, method and period of depreciation are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the investment property.
Investment properties are derecognised when either they have been disposed of or when the investment property
is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or
losses on the retirement or disposal of an investment property are recognised in the profit or loss in the year in
which they arise.
(j)
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined on the First-In, First-Out (“FIFO”) basis. Cost of finished goods and work-in-progress includes
direct materials, direct labour, other direct costs and appropriate production overheads.
Net realisable value represents the estimated selling price in the ordinary course of business less all estimated
costs to completion and the estimated costs necessary to make the sale.
(k) Income tax
(i)
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised
outside profit or loss, either in other comprehensive income or directly in equity.