66
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
(cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Financial Instruments (Cont’d)
(iv) Derecognition
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash
flows from the financial asset expire or the financial asset is transferred to another party without retaining
control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the
difference between the carrying amount and the sum of the consideration received (including any new
asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised
in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the
contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference
between the carrying amount of the financial liability extinguished or transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
in profit or loss.
Property, Plant and Equipment
Property, plant and equipment other than freehold land are stated at cost less accumulated depreciation and
accumulated impairment losses, if any.
Freehold land is stated at cost less impairment losses, if any and is not depreciated.
Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on
the straight-line method to write off the depreciable amount of the assets over their estimated useful lives.
Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the
asset is fully depreciated. The principal annual rates used for this purpose are:-
Freehold buildings
50 years
Long leasehold buildings
50 years
Leasehold land
47 - 60 years
Factory and office renovation
10%
Plant and machinery
10% - 20%
Workshop tools
20%
Office equipment
33.3% - 80%
Furniture and fittings
20% - 33.3%
Motor vehicles
14%
Computers
33% - 85.7%
Capital work-in-progress is stated at cost. Cost comprises the direct expenditure incurred on the construction
and commissioning of the capital asset. Capital work-in-progress is not depreciated until its completion and
availability for commercial use.
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the
end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent
with previous estimates and the expected pattern of consumption of the future economic benefits embodied
in the items of the property, plant and equipment.
