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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110)
(21185-P)
• Annual Report 2020
129
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(i) Impairment of non-financial assets (cont’d.)
Impairment losses are recognised in profit or loss.
An assessment ismade at each reporting date as towhether 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.
The Group’s and the Company’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group and
the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets of the Group and of the Company are classified as either:
-
Financial assets at amortised cost (debt instruments) (“AC”);
-
Financial assets at fair value through profit or loss (“FVTPL”);