66
JAYA TIASA HOLDINGS BERHAD
Notes to the Financial Statements (cont’d)
for the financial year ended 30 June 2015
2.
Summary of significant accounting policies (cont’d)
2.8 Foreign currency (cont’d)
(b) Foreign currency transactions (cont’d)
Exchange differences arising on the translation of non-monetary items carried at fair value are included
in profit or loss for the period except for the differences arising on the translation of non-monetary items
in respect of which gains and losses are recognised directly in equity. Exchange differences arising from
such non-monetary items are also recognised directly in equity.
(c)
Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rates of exchange ruling at the
reporting date and income and expenses are translated at exchange rates at the dates of the transactions.
The exchange differences arising on the translation are taken directly to other comprehensive income.
On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income
and accumulated in equity under foreign currency translation reserve relating to that particular foreign
operation is recognised in the profit or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets
and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations
and translated at the closing rate at the reporting date.
2.9 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant
and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment, except for freehold land, are measured at cost less
accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and
equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with
specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost
is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria
are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Freehold land has an unlimited useful life and therefore is not depreciated. Leasehold land is amortised over
its remaining lease term. Depreciation is computed on a straight-line basis over the estimated useful lives of
the assets as follows:
Factories, buildings and quarters
10 - 50 years or over remaining lease period
Aircraft, watercraft, motor vehicles, plant and machinery
5 - 20 years
Roads and bridges
10 years
Office renovation, furniture, fittings and equipment
10 years
Capital work-in-progress are not depreciated as these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
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 on derecognition of the asset is included in the profit
or loss in the year the asset is derecognised.
