Content2011 - PETRONAS Gas Berhad

Notes to the Financial Statements
31 MarCh 2011
2. Significant Accounting Policies (Continued)
148 petronas gas berhad (101671-h)
2.5 Leased assets - prepaid lease payments
The Group had previously classified leasehold land that normally has an indefinite economic life and title is not expected to pass to
the lessee by the end of the lease term as an operating lease. The payment made on entering into or acquiring a leasehold land is
accounted for as prepaid lease payments and amortised over the lease term in accordance with the pattern of benefits provided.
Leasehold land is classified into long lease and short lease. Long lease is defined as a lease with an unexpired lease period of fifty
years or more. Short lease is defined as a lease with an unexpired lease period of less than fifty years.
On adoption of Amendment to FRS117, leases of a leasehold land which in substance is a finance lease has been reclassified to
property, plant and equipment and measured as such retrospectively.
2.6 Investments
Long term investments in subsidiary, associate and jointly controlled entity are stated at cost less impairment loss, if any, in the
Company’s financial statements.
The carrying amount of these investments includes fair value adjustments on shareholder’s loans and advances, if any.
2.7 Intangible asset - goodwill
Goodwill arises on the acquisition of subsidiary, associate and jointly controlled entity.
Goodwill arising from acquisitions represents the excess of the cost of the acquisition over the Group’s interest in the fair values of
the net identifiable assets and liabilities and contingent liabilities of the acquiree.
When the excess is negative (negative goodwill), it is recognised immediately in the profit or loss.
Goodwill is initially measured at cost. Following the initial recognition, goodwill is measured at cost less any accumulated impairment
losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
In respect of equity accounted investee, the carrying amount of goodwill is included in the carrying amount of the investment. The
entire carrying amount of the investment is reviewed for impairment when there is objective evidence of impairment.
2.8 Non-derivative financial instruments
i) Financial assets
Initial recognition
Financial assets within the scope of FRS 139: Financial Instruments: Recognition and Measurement are classified as financial
assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial
assets. The Group and the Company determine the classification of its financial assets at initial recognition.
Financial assets are recognised initially at fair value, normally being the transaction price plus, in the case of financial assets
not at fair value through profit or loss, any directly attributable transaction costs.
Purchases or sales that require delivery of financial assets within a timeframe established by regulation or convention in the
marketplace (regular way purchases) are recognised on the trade date i.e. the date that the Group and the Company commit
to purchase or sell the financial asset.