Page 144 - KPJ_2011

2. Summary of significant accounting policies (continued)
2.6 Foreign currency(continued)
(b) Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange
rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated
in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary
items denominated in foreign currencies that are measured at historical cost are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign
currencies measured at fair value are translated using the exchange rates at the date when the fair value
was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
reporting date are recognised in promt or loss except for exchange differences arising on monetary items
that form part of the Group’s net investment in foreign operations, which are recognised initially in other
comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign
currency translation reserve is reclassimed from equity to promt or loss of the Group on disposal of the
foreign operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
promt 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 as other comprehensive income. Exchange differences
arising from such non-monetary items are also recognised as other comprehensive income.
(c) Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rate 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 promt 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.
2.7 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 benemts associated with
the item will now to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, plant and equipment and furniture and mxtures are measured at cost less accumulated
depreciation and accumulated impairment losses. When signimcant parts of property, plant and equipment are
required to be replaced in intervals, the Group recognises such parts as individual assets with specimc 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 satismed. All
other repair and maintenance costs are recognised in promt or loss as incurred. Freehold land and buildings are
measured at fair value less accumulated depreciation on buildings and impairment losses recognised after the
date of the revaluation. Valuations are performed with sufmcient regularity to ensure that the carrying amount does
not differ materially from the fair value of the freehold land and buildings at the reporting date.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset
revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously
recognised in promt or loss, in which case the increase is recognised in promt or loss. A revaluation demcit is
recognised in promt or loss, except to the extent that it offsets an existing surplus on the same asset carried in the
asset revaluation reserve.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
139 ANNUAL REPORT 2011