Kumpulan Fima Berhad
Notes to the
31 march 2017
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
Foreign currencies (cont’d.)
Foreign currency transactions (cont’d.)
Exchange difference arising on the retranslation of non-monetary items carried at fair value are included in
profit or loss for the period except for the differences arising on the retranslation 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.
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.