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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.)
(n) Leases (cont’d.)
Accounting policies applied from 1 April 2019 (cont’d.)
(ii) As lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Rental income arising is accounted for on a
straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due
to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and recognised over the lease term on the same
basis as rental income. Contingent rents are recognised as revenue in the period in which they are
earned.
Accounting policies applied until 31 March 2019
(i)
As lessee
Finance leases, which transfer to the Group and the Company substantially all the risks and rewards
incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value
of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct
costs are also added to the amount capitalised. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged
as expenses in the periods in which they are incurred.
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no
reasonable certainty that the Group and the Company will obtain ownership by the end of the lease
term, the asset is depreciated over the shorter of the estimated useful life and the lease term.
Operating lease payments are recognised as an expense on a straight-line basis over the term of the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of
rental expense over the lease term on a straight-line basis.
(ii) As lessor
Leases where the Group and the Company retain substantially all the risks and rewards of ownership of the
asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are
added to the carrying amount of the leased asset and recognised over the lease term on the same basis
as rental income. The accounting policy for rental income is set-out in Note 2.4(d) Other revenue (i).