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KUMPULAN FIMA BERHAD
(11817-V) |
Annual Report
2016
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Summary of Significant Accounting Policies (Cont’d)
(h) Property, Plant and Equipment and Depreciation
All items of property, plant and equipment are initially recorded at cost. The cost of an item of
property, plant and equipment is recognised as an asset, if and only if, it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably.
Subsequent to recognition, property, plant and equipment except for certain freehold land and
buildings are measured at cost less accumulated depreciation and accumulated impairment losses.
When significant parts of property, plant and equipment are required to be replaced in intervals,
the Group recognises such parts as individual assets with specific useful lives and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement if the recognition criteria is satisfied. All other
repair and maintenance costs are recognised in profit or loss as incurred.
Freehold land and buildings other than office buildings are stated at revalued amount, which is the
fair value at the date of the revaluation less any accumulated impairment losses. Revaluations
are made at least once in every five years based on a revaluation by an independent valuer on an
open market value basis. Any revaluation surplus is credited to the revaluation reserve included
within equity, except to the extent that it reverses a revaluation decrease for the same asset
previously recognised in profit or loss, in which case the increase is recognised in profit or loss to
the extent of the decrease previously recognised.
A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in
respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal
or retirement of an asset, any revaluation reserve relating to the particular asset is transferred
directly to retained earnings.
Freehold land has an unlimited useful life and therefore is not depreciated. Land held on long
lease is held on a lease with an unexpired period of 50 years or more. A lease of less than 50
years is described as a short lease.
Other property, plant and equipment is depreciated on a straight-line basis to write-off the cost of
each asset to its residual value over the estimated useful life, at the following annual rates:
Buildings
2.0% - 10.0%
Leasehold land
Over lease period
Plant and machinery
4.0% - 33.33%
Fish canning facilities
2.0%
Warehouses, storage tanks and pipelines
4.0%
Motor vehicles
10.0% - 33.33%
Office equipment, furniture and fittings
6.66% - 25.0%
Renovations
10.0% - 20.0%
Tools, accessories and computer equipment
20.0% - 33.33%