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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110) (21185-P) •
Annual Report 2020
140
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(w) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
-
In the principal market for the asset or liability, or
-
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
- Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities.
- Level 2 - Valuation technique for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
- Level 3 - Valuation technique that use inputs that have a significant effect on the recorded fair value that are not
based on observable market data.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company
determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
2.5 Significant accounting estimates and judgements
Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They
affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and
disclosures made. They are assessed on an on-going basis and are based on experience and other relevant factors, including
expectations of future events that are believed to be reasonable under the circumstances. The significant key assumptions
concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: