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annual report | 2012 Gunung Capital Berhad (330171-P) 56 NOTES TO THE FINANCIAL STATEMENTS (cont’d) 31 DECEMBER 2012 2 SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.4 Summary of Significant Accounting Policies (cont’d) (e) Property, Plant and Equipment (cont’d) The residual values, useful lives 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 items of the property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising from de-recognition of the assets is included in the income statement in the year in which the assets is derecognised. (f) Investment Properties Investment properties consist of land and buildings held for capital appreciation or rental purpose and not occupied or only an insignificant portion is occupied for use or in the operations of the Group. Investment properties are treated as non-current investment and are measured initially at cost, including transaction costs. The carrying amount included the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excluded the costs of day-to-day servicing of investment properties. Fair value is arrived at by reference market evidence of transaction prices for similar properties and is performed by independent professional valuers. Gain or losses arising from changes in the fair values of investment properties are recognised in the income statements in the year in which they arise. Investment properties are derecognised when either they have been disposed or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal.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 income statement in the year in which they arise. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with accounting policy for property, plant and equipment set out in Note 2.4(e) up to the date of change in use. (g) Financial Assets Financial assets are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. Financial assets are initially recognised at fair value plus directly attributable transaction cost, except for financial assets at fair value through profit and loss, which are recognised at fair value. The Group determines the classification of its financial assets after initial recognition and where appropriate, re-evaluates this designation at each reporting period.
NOTES TO THE FINANCIAL STATEMENTS (cont’d) 31 DECEMBER 2012 2 SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.4 Summary of Significant Accounting Policies (cont’d) (g) Financial Assets (cont’d) i) Financial assets at fair value through profit or loss Financial assets held for trading are included in the category “financial assets at fair value through profit and loss” and are classified as current assets. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivative financial instruments are also classified as held for trading unless they are designated as effective hedging instruments. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains on net losses on financial assets at fair value through profit or loss do not include exchange difference, interest and dividend income, which are recognised separately in profit or loss as part of other losses or other income. Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are primarily held for trading purposes are presented as current whereas financial assets that are not primarily held for trading are presented as current or non-current based on the settlement date. ii) Loans and receivables Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through amortisation process. Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting period which are classified as non-current. iii) Available-for-sale financial assets Available-for-sale financial assets are financial assets that designated as available for sale or are no classified in any of the other three categories. Subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payment is established. Investments in equity instruments whose fair value cannot be reliably measured are measured at costs less impairment loss. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting period. A financial asset is derecognised when the contractual right to receive cash flow from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. Gunung Capital Berhad (330171-P) 57 annual report | 2012
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(Source: CEO of Gunung Capital Bhd,
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Notes:- 1. A member of the Company,
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