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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.)
(e) Property, Plant and Equipment (Contd.)
Freehold land and buildings other than office buildings are stated at revalued amount, which is the
fair value at the date of the revaluation less any accumulated impairment losses. Revaluations
are made at least once in every five years based on a revaluation by an independent valuer on an
open market value basis. Any revaluation surplus is credited to the revaluation reserve included
within equity, except to the extent that it reverses a revaluation decrease for the same asset
previously recognised in profit or loss, in which case the increase is recognised in profit or loss to
the extent of the decrease previously recognised.
A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in
respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal
or retirement of an asset, any revaluation reserve relating to the particular asset is transferred
directly to retained earnings.
Freehold land has an unlimited useful life and therefore is not depreciated. Land held on long
lease is held on a lease with an unexpired period of 50 years or more. A lease of less than 50
years is described as a short lease.
Other property, plant and equipment is depreciated on a straight-line basis to write-off the cost of
each asset to its residual value over the estimated useful life, at the following annual rates:
Buildings
2% to 10%
Leasehold land
Over lease period
Plant and machinery
10% - 25%
Factory and office renovations
2% to 20%
Equipment, furniture and fittings and motor vehicles
10% - 33.3%
Assets under construction or capital work-in-progress included in property, plant and equipment
are not depreciated as these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end,
and adjusted prospectively if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the
asset is included in the profit or loss in the year the asset is derecognised.