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Annual Report 2020
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Notes to the Financial Statements
As at 31 March 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(c) Investment in associate companies
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence.
An associate is equity accounted for from the date the Group obtains significant influence until the date the
Group ceases to have significant influence over the associate.
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, the Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
After application of the equitymethod, theGroup 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.