Sasbadi Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS 84 SASBADI HOLDINGS BERHAD (1022660-T) I BER AD (10 2 60-T) 2. Significant accounting policies (continued) (e) Leased assets (continued) (i) Finance lease (continued) Leasehold land which in substance is a finance lease is classified as property, plant and equipment. (ii) Operating lease Leases where the Group or the Company does not assume substantially all the risks and rewards of the ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred. Leasehold land which in substance is an operating lease is classified as prepaid lease payments. (f) Intangible assets (i) Goodwill Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. (ii) Other intangible assets Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at cost less any accumulated amortisation and any accumulated impairment losses. The fair value of intellectual properties acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the patent or trademark being owned. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets. (iii) Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.