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Notes to the
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(c) Investment in associate companies (cont’d.)
The Group’s investment in associate are accounted for using the equity method. Under the equity
method, the investment in associate is measured in the statement of financial position at cost plus
post-acquisition changes in the Group’s share of net assets of the associate. Goodwill relating to
associate is included in the carrying amount of the investment. Any excess of the Group’s share of the
net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost
of the investment is excluded from the carrying amount of the investment and is instead included
as income in the determination of the Group’s share of the associate’s profit or loss for the period in
which the investment is acquired.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate,
including any long-term interests that, in substance, form part of the Group’s net investment in the
associates, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the associate.
After application of the equity method, the Group determines whether it is necessary to recognise
an additional impairment loss on the Group’s investment in its associates. The Group determines at
each reporting date whether there is any objective evidence that the investment in the associate is
impaired. If this is the case, the Group calculates the amount of impairment as the difference between
the recoverable amount of the associate and its carrying value and recognises the amount in profit
or loss.
The financial statements of the associated company are prepared as of the same reporting date as
the Company. Where necessary, adjustments are made to bring the accounting policies in line with
those of the Group.
In the Company’s separate financial statements, investments in associate are stated at cost less
impairment losses. On disposal of such investments, the difference between net disposal proceeds
and their carrying amounts is included in profit or loss.
The most recent available audited financial statements of the associates are used by the Group
in applying the equity method. Where the dates of the audited financial statements used are not
coterminous with those of the Group, the share of results is arrived at from the last audited financial
statements available and management financial statements to the end of the accounting period.
Uniform accounting policies are adopted for like transactions and events in similar circumstances.
(d) Revenue recognition
The Group is in the business of production of security and confidential documents, oil palmproduction,
and processing, production and sale of bank notes, sale of food products and property management
services. The Group has generally concluded that it is the principal in its revenue arrangements
because it typically controls the goods or services before transferring them to the customer.
Kumpulan Fima Berhad
(11817-V)
Annual Report 2019
130