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FIMA CORPORATION BERHAD
(21185-P) |
Annual Report
2016
NOTES TO THE FINANCIAL
STATEMENTS 31 MARCH 2016
(contd.)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONTD.)
2.3 Summary of Significant Accounting Policies (Contd.)
(d) 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 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 associate 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.
(e) Property, Plant and Equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of
property, plant and equipment is recognised as an asset, if and only if, it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably.
Subsequent to recognition, property, plant and equipment except for certain freehold land and
buildings are measured at cost less accumulated depreciation and accumulated impairment losses.
When significant parts of property, plant and equipment are required to be replaced in intervals,
the Group recognises such parts as individual assets with specific useful life and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement if the recognition criteria is satisfied. All other
repair and maintenance costs are recognised in profit or loss as incurred.