Annual Report (Complete) - MYCRON Steel Berhad
Annual Report (Complete) - MYCRON Steel Berhad
Annual Report (Complete) - MYCRON Steel Berhad
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Notes to the Financial Statements<br />
30 June 2010<br />
(continued)<br />
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
(i)<br />
Share capital (continued)<br />
Interim dividends are recognised as liabilities when declared before the balance sheet date. Final dividends are accounted<br />
for when it had been approved by the Company’s shareholders.<br />
(j)<br />
Treasury shares<br />
When the Company or its subsidiaries purchases the Company’s equity share capital, the consideration paid, including any<br />
directly attributable incremental external costs, net of tax, is deducted from total equity as treasury shares until they are<br />
cancelled, reissued or disposed off. Where such shares are subsequently sold or reissued, any consideration received, net<br />
of any directly attributable incremental external costs and the related tax effects, is included in total equity.<br />
(k)<br />
Impairment of non-financial assets<br />
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that<br />
are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the<br />
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying<br />
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and<br />
value-in-use.<br />
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable<br />
cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for<br />
possible reversal of the impairment at each reporting date.<br />
The impairment loss is charged to the income statement unless it reverses a previous revaluation in which case it is charged<br />
to the revaluation surplus. Impairment loss on goodwill is not reversed. In respect of other assets, any subsequent increase<br />
in recoverable amount is recognised in the income statement unless it reverses an impairment loss on a revalued asset in<br />
which case it is taken to revaluation surplus.<br />
(l)<br />
Foreign currencies<br />
(i)<br />
Functional and presentation currency<br />
The management has determined the currency of the primary economic environment in which the Group operates<br />
i.e. functional currency, to be Ringgit Malaysia. Sales price and major costs of providing goods and services including<br />
major operating expenses are primarily influenced by fluctuations in Ringgit Malaysia. The financial statements are<br />
presented in Ringgit Malaysia, which is the Group’s functional and presentation currency.<br />
(ii)<br />
Transactions and balances<br />
Transactions in foreign currencies are translated into Ringgit Malaysia at the rates of exchange prevailing at the<br />
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet<br />
date are translated to Ringgit Malaysia at the closing rates. Foreign exchange differences arising on the settlement<br />
of such transactions are recognised in the income statement. Non-monetary assets and liabilities denominated in<br />
foreign currencies are translated to Ringgit Malaysia at rates of exchange prevailing at the date of transactions.<br />
Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are<br />
analysed between translation differences resulting from changes in the amortised cost of the security, and other<br />
changes in the carrying amount of the security. Translation differences related to changes in amortised cost are<br />
recognised in income statement and other changes in carrying amount are recognised in equity.<br />
Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or<br />
loss. Translation differences on nonmonetary financial assets and liabilities such as equities held at fair value through<br />
profit or loss are recognised in income statement as part of the fair value gain or loss. Translation differences on<br />
non-monetary financial assets such as equities classified as available-for-sale are included in the available-for-sale<br />
reserve in equity.<br />
(m) Provisions<br />
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; when it is<br />
probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.<br />
Provisions are not recognised for future operating losses.<br />
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined<br />
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect<br />
to any one item included in the same class of obligations may be small.<br />
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