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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110) (21185-P) •
Annual Report 2020
128
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(g) Investment properties (cont’d.)
Depreciation of investment properties is provided for on a straight-line basis to write off the cost of the property to its
residual value over its estimated useful life, at the following annual rates:
Freehold building
2%
Leasehold building
2% to 3%
Leasehold land
Over lease period
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that
the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the investment property.
An investment property is derecognised when either it has been disposed of or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses
on the retirement or disposal of an investment property are recognised in the profit or loss in the year in which they
arise.
(h) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not
amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(i) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when an annual impairment assessment for an asset is required, the Groupmakes an estimate of the
asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units (“CGU”)).
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.