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Notes To The
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(i) Impairment of non-financial assets (cont’d.)
In assessing value in use, the estimated future cash flows expected to be generated by the asset
are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable
amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to
reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised previously. Such reversal is recognised in profit or loss.
(j) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair
value through profit or loss and fair value through other comprehensive income (“FVTOCI”).
“The classification of financial assets at initial recognition depends on the financial asset’s contractual
cash flow characteristics and the Group’s and the Company’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for
which the Group and the Company has applied the practical expedient, the Group and the Company
initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables that do not contain a significant
financing component or for which the Group and the Company has applied the practical expedient
are measured at the transaction price determined under MFRS 15.
In order for a financial asset to be classified and measured at amortised cost, it needs to give rise
to cash flows that are ‘solely payments of principal and interest (“SPPI”) on the principal amount
outstanding. The assessment is referred to as the SPPI test and is performed at an instrument level.
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Fima Corporation Berhad
(21185-P)
Annual Report 2019