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Annual Report 2013
KPJ HEALTHCARE BERHAD
195
2.
Summary of signi cant accounting policies (continued)
2.30 Fair value measurement (continued)
The Group uses valuation techniques that appropriate in circumstances and for which suf cient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the nancial statements are categorized within the fair value
hierarchy, described as follows, based on the lowest level input that is signi cant to the fair value measurement as a whole:
(i)
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets of liabilities
(ii) Level 2 – Valuation techniques for the lowest level input that is signi cant to the fair value measurement is directly or
indirectly observable
(iii) Level 3 – Valuation techniques for which the lowest level input that is signi cant to the fair value measurement is
unobservable
For the purposes of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the assets or liabilities and the level of the of fair value hierarchy as explained above.
3.
Signi cant accounting judgements and estimates
The preparation of the Group’s nancial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However,
uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying
amount of the asset or liability affected in the future.
3.1
Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those
involving estimations, which have the most signi cant effect on the amounts recognised in the nancial statements:
(a)
Classi cation between investment properties and property, plant and equipment
The Group has developed certain criteria based on MFRS 140 in making judgement whether a property quali es as an
investment property. Investment property is a property held to earn rentals or for capital appreciation or both.
Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held
for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold
separately (or leased out separately under a nance lease), the Group would account for the portions separately. If the
portions could not be sold separately, the property is an investment property only if an insigni cant portion is held for use in
the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property
basis to determine whether ancillary services are so signi cant that a property does not qualify as investment property.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)