Tropicana Corporation Berhad Annual Report 2019

For the financial year ended 31 December 2019 Notes to the Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.) 2.16 Irredeemable convertible preference shares (“ICPS”) ICPS is a financial instruments that contains both a liability and an equity component that can be converted to share capital at the option of the holder, when the number of shares to be issued does not vary with changes in their fair value. The proceeds are first allocated to the liability component, determined based on the fair value of a similar liability that does not have a conversion feature or similar associated equity component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition the liability component of the ICPS is measured at amortised cost using the effective interest method. The equity component of the ICPS is not remeasured subsequent to initial recognition. Interest and losses and gains relating to the ICPS is recognised in profit or loss. On conversion, the ICPS is reclassifed to equity, no gain or loss is recognised on conversion. 2.17 Land use rights Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at cost less accumulated amortisation and accumulated impairment losses, if any. The land use rights are amortised over their lease terms. The Group has assessed and classi ed land use rights as nance leases based on the extent to which risks and rewards incidental to ownership of the land resides with the Group arising from the lease term. 2.18 Subsidiaries A subsidiary is an entity over which the Group has all the following: (i) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); (ii) exposure, or rights, to variable returns from its investment with the investee; and (iii) the ability to use its power over the investee to affect its returns. In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. 2.19 Investments in an associate and joint ventures An associate is an entity in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Tropicana Corporation Berhad Annual Report 2019 pg 144 About Tropicana Our Strategic Performance Our Leadership