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Annual Report 2020
166
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.)
(u) Fair value measurement (cont’d.)
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and
the Company determine 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.
2.5 Significant accounting judgements and estimates
Estimates, assumptions concerning the future and judgements are made in the preparation of the financial
statements. They affect the 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)
Impairment of goodwill
Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an
estimation of the value-in-use of the CGU to which goodwill is allocated. Estimating a value-in-use requires
management to make an estimate of the expected future cash flows from the CGU and also to choose a
suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of
goodwill as at 31 March 2020 was RM12,710,000 (2019: RM12,710,000). Further details are disclosed in Note
19.
(ii) Inventories
In determining the costing of inventories, management’s judgement is required in determining the basis of
finished goods and work-in-progress valuation which comprise costs of raw materials, direct labour, other
direct costs, and the appropriate allocation of overheads based on normal operating capacity.
(iii) 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.