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Kumpulan Fima Berhad



Notes to the

financial statements

31 march 2017


Significant accounting policies (cont’d.)

2.3 Summary of significant accounting policies (cont’d.)


Investment properties (cont’d.)

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the

amount, method and period of depreciation are consistent with previous estimates and the expected pattern of

consumption of the future economic benefits embodied in the investment property.

Investment properties are derecognised when either they have been disposed of or when the investment property

is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or

losses on the retirement or disposal of an investment property are recognised in the profit or loss in the year in

which they arise.



Inventories are stated at the lower of cost and net realisable value.

Cost is determined on the First-In, First-Out (“FIFO”) basis. Cost of finished goods and work-in-progress includes

direct materials, direct labour, other direct costs and appropriate production overheads.

Net realisable value represents the estimated selling price in the ordinary course of business less all estimated

costs to completion and the estimated costs necessary to make the sale.


Income tax


Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the

taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or

substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised

outside profit or loss, either in other comprehensive income or directly in equity.


Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between

the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:


where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in

a transaction that is not a business combination and, at the time of the transaction, affects neither the

accounting profit nor taxable profit or loss; and


in respect of taxable temporary differences associated with investments in subsidiary companies,

associated companies and interests in joint ventures, where the timing of the reversal of the temporary

differences can be controlled and it is probable that the temporary differences will not reverse in the

foreseeable future.