LEEKEE INDUSTRIES (M) SDN - teo seng capital berhad

TEO SENG CAPITAL BERHAD
(Incorporated In Malaysia)
Company No : 732762 - T
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2011
4. ACCOUNTING POLICIES AND STANDARDS (CONT’D)
4.2 Summary of Significant Accounting Policies (Cont’d)
(c)
Property, plant and equipment and depreciation (cont’d)
The residual values, useful lives and depreciation method are reviewed at the end of
each reporting period 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 property, plant and equipment.
The carrying amounts of property, plant and equipment are reviewed for impairment
when events or changes circumstances indicate that the carrying amounts may not
be recoverable. The policy for the recognition and measurement of impairment
losses is in accordance with Note 4.2(f)(ii).
An item of property, plant and equipment is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. The difference
between the net disposal proceeds, if any, and the carrying amount is recognised in
profit or loss and the unutilised portion of the revaluation surplus on that item, if any,
is transferred directly to retained profits.
In the previous financial year, leasehold land that normally had an indefinite
economic live and title was not expected to pass to the lessee by the end of the
lease term was treated as an operating lease. The payment made on entering into or
acquiring leasehold land that was accounted for as an operating lease represents
prepaid lease payments.
During the financial year, the Group adopted the amendments made to FRS 117 –
Leases in relation to the classification of leasehold land. The Group’s leasehold land
which in substance is a finance lease has been reclassified as property, plant and
equipment and measured as such retrospectively.
(d)
Assets under hire purchase
Assets acquired under hire purchase are capitalised in the financial statements and
are depreciated in accordance with the policy set out in Note 4.2(c) above. Each hire
purchase payment is allocated between the liability and finance charges so as to
achieve a constant rate on the finance balance outstanding. Finance charges are
recognised in profit or loss over the period of the respective hire purchase
agreements.
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