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NOTES TO THE FINANCIAL STATEMENTS (cont’d)<br />
31 DECEMBER 2012<br />
2 SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
2.4 Summary of Significant Accounting Policies (cont’d)<br />
(c) Goodwill on Consolidation<br />
Goodwill is initially recognised as an asset at cost and subsequently measured at cost less accumulated<br />
impairment losses.<br />
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (“CGU”)<br />
expected to benefit from the synergies of the combination. CGU to which goodwill has been allocated are test<br />
for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the<br />
recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated<br />
first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the<br />
unit on a pro-rata basis of the carrying amount of each asset in the unit. An impairment loss recognised for<br />
goodwill shall not be reversed in a subsequent period.<br />
On disposal of a subsidiary company, the attributable amount of goodwill is included in the determination<br />
of the gain or loss on disposal.<br />
(d) Investments in Subsidiaries<br />
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses,<br />
if any. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is<br />
taken up in the income statement.<br />
(e) Property, Plant and Equipment<br />
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.<br />
Cost includes expenditures that are directly attributable to the acquisition of the asset.<br />
Certain land and buildings of the Group are shown at valuation less subsequent depreciation and impairment<br />
losses. The directors have not adopted a policy of regular valuation, and have applied the transitional provisions<br />
of MFRS 1, First-time adoption of MFRS which permits these assets to be stated at their prevailing valuations<br />
less depreciation. The valuations were initially determined by independent professional valuers on the open<br />
market basis, and no later valuations were recorded in the financial statements.<br />
Surpluses arising from revaluation are dealt with in the property revaluation reserve. Any deficit arising is<br />
offset against the revaluation reserve to the extent of a previous increase for the same property. In all other<br />
cases, a decrease in carrying amount will be charged to the profit or loss.<br />
Depreciation is calculated to write off the cost of the property, plant and equipment to their residual values on<br />
the straight line method over their expected useful lives. Freehold land is not amortised. Long-leasehold land<br />
is amortised evenly over its applicable lease period. The annual rates used for other assets are as follows:<br />
%<br />
Buildings 2<br />
Plant and machinery 10 - 20<br />
Motor vehicles 14 - 20<br />
Furniture, fittings and equipment 10 - 20<br />
Gunung Capital Berhad (330171-P)<br />
55<br />
annual report | 2012