TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
63
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(f) Intangible assets
Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect
of equity-accounted associates and joint venture, the carrying amount of goodwill is included in the carrying
amount of the investment and an impairment loss on such an investment is not allocated to any asset, including
goodwill, that forms part of the carrying amount of the equity-accounted associates and joint venture.
Goodwill is not amortised but is tested for impairment annually and whenever there is an indication that it may be
impaired.
(g) Investment property
(i) Investment property carried at fair value
Investment properties are properties which are owned or held under a leasehold interest to earn rental
income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the
production or supply of goods and services or for administrative purposes.
Investment properties are measured initially at cost and subsequently at fair value with any change therein
recognised in profit or loss for the period in which they arise. Where the fair value of the investment property
under construction is not reliably determinable, the investment property under construction is measured at
cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost
of self-constructed investment property includes the cost of the materials and direct labour, any other costs
directly attributable to bringing the investment property to a working condition for their intended use and
capitalised borrowing costs.
An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no
future economic benefits are expected from its disposal. The difference between the net disposal proceeds
and the carrying amount is recognised in profit or loss in the period in which the item is derecognised.
(ii) Reclassification from/to investment property
When an item of property, plant and equipment is transferred to investment property following a change in its
use, any difference arising at the date of transfer between the carrying amount of the item immediately prior
to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and equipment.
However, if a fair value gain reserves a previous impairment loss, the gain is recognised in profit or loss.
Upon disposal of an investment property, any surplus previously recorded in equity is transferred to retained
earnings; the transfer is not made through profit or loss.
When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value
at the date of reclassification becomes its cost for subsequent accounting.
(h) Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in
acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing
location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of
production overheads based on normal operating capacity.
