Basic HTML Version
Annual Report 2013
KPJ HEALTHCARE BERHAD
190
2.
Summary of signi cant accounting policies (continued)
2.18 Financial liabilities (continued)
A nancial liability is derecognised when the obligation under the liability is extinguished. When an existing nancial liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modi ed, such an exchange or modi cation is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in pro t or loss.
2.19 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition,
construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for
its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised
until the assets are substantially completed for their intended use or sale.
All other borrowing costs are recognised in pro t or loss in the period they are incurred. Borrowing costs consist of interest and
other costs that the Group and the Company incurred in connection with the borrowing of funds.
2.20 Leases
(a)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased
item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the
minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned
between the nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged to pro t or loss. Contingent rents, if any, are charged as expenses in the
periods in which they are incurred.
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that
the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful
life and the lease term.
Operating lease payments are recognised as an expense in pro t or loss on a straight-line basis over the lease term. The
aggregate bene t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on
a straight-line basis.
(b)
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classi ed as operating
leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset
and recognised over the lease term on the same bases as rental income.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)