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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110)
(21185-P)
• Annual Report 2020
135
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(s) Foreign currencies (cont’d.)
(ii) Foreign currency transactions
Transactions in foreign currencies other than the Company’s functional currency (foreign currencies) are recorded
in the functional currencies at exchange rates approximating those ruling at the transaction dates. At each
reporting date, monetary items denominated in foreign currencies are translated at the rates prevailing on the
reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated
at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items,
are included in profit or loss for the period except for exchange differences arising on monetary items that form
part of the Group’s net investment in foreign operation. These are initially taken directly to the foreign currency
translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in
profit or loss. Exchange differences arising on monetary items that form part of the Company’s net investment in
foreign operation are recognised in profit or loss in the Company’s separate financial statements or the individual
financial statements of the foreign operation, as appropriate.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or
loss for the period except for the differences arising on the translation of non-monetary items in respect of which
gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are
also recognised directly in equity.
(iii) Foreign operations
The results and financial position of foreign operations that have a functional currency different from the
presentation currency, RM, of the consolidated financial statements are translated into RM as follows:
-
Assets and liabilities for each statement of financial position presented are translated at the closing rate
prevailing at the reporting date;
-
Income and expenses for each profit or loss are translated at average exchange rates for the year, which
approximates the exchange rates at the dates of the transactions; and
-
All resulting exchange differences are taken to the foreign currency translation reserve within equity.
(t) Employee benefits
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which
the associated services are rendered by employees of the Group and of the Company. Short term accumulating
compensated absences such as paid annual leave are recognised when services are rendered by employees that
increase their entitlement to future compensated absences. Short termnon-accumulating compensated absences
such as sick leave are recognised when the absences occur.