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)
4.5 Critical Accounting Estimates and Judgements (Cont’d)
(i)
Classification of leasehold land
The classification of leasehold land as a finance lease or an operating lease requires
the use of judgement in determining the extent to which risks and rewards incidental
to its ownership lie. Despite the fact that there will be no transfer of ownership by the
end of the lease term and that the lease term does not constitute the major part of
the indefinite economic life of the land, management considered that the present
value of the minimum lease payments approximated to the fair value of the land at
the inception of the lease. Accordingly, management judged that the Group has
acquired substantially all the risks and rewards incidental to the ownership of the
land through a finance lease.
(j)
Fair value estimates for certain financial assets and liabilities
The Group carries certain financial assets and liabilities at fair value, which requires
extensive use of accounting estimates and judgement. While significant components
of fair value measurement were determined using verifiable objective evidence, the
amount of changes in fair value would differ if the Group uses different valuation
methodologies. Any changes in fair value of these assets and liabilities would affect
profit and/or equity.
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