7/28/2019 fa report(c) (1)
1/56
1.0INTRODUCTIONFinancial Reporting Standards (FRS) was first implement on 1 January 2006 and with
effect from that day all reporting entities in Malaysia are required to prepare their financial
statement in accordance with the adopted new and improved Financial Reporting Standards.
Financial Reporting Standard (FRS) is a standard required to be followed by all the listed
company in Malaysia when preparing the annual financial report to ensure that all the
information are being disclose in a suitable way and understandable by the public. To help
our capital markets have become globally, FRS has improved to equivalent to International
Financial Reporting Standard (IFRS) which will help to place Malaysian business on a level
playing field with its international counterparts.
Our analysis involved FRS 3 (Business Combination) which is FRS 117 Lease, FRS 136
Impairment of Assets, FRS 138 Intangible Assets, and FRS 140 Investment Property. We
have randomly selected 3 public companies (in the same industry) listed in Bursa Malaysia to
do analyze on their accounting treatment, especially in the presentation and disclosure part.
We have chosen Kretam Holdings Bhd, Sarawak Plantation Bhd, and Genting Plantations
Berhad to study the disclosure of FRS listed above and analyzes the compliance level of each
of the companies.
To calculate for the level of compliance, we will use this formula
level of compliance = number of ticks
number of item under frs less number of item unrelated to the company
7/28/2019 fa report(c) (1)
2/56
BACKGROUND OF COMPANY
Kretam Holdings Bhd
KRETAM HOLDING BERHAD (KHB) was listed on the Bursa Malaysia Main Board(Plantation Sector) on 18th January 1989.
The KHB Group is involved in investment holding, oil palm cultivation, milling and sale
of oil palm products, provision of plantation & palm oil mill management including services and
stock broking. KHB group head office is located at Sandakan town while the plantation division
being its core business is located at Sandakan & Tawau area.
Syarikat Kretam Mill Sdn Bhd, one of KHB's subsidiaries, owns and operates a palm oil mill at
Mile 44 Sandakan - Lahad Datu highway near Bukit Garam, Kinabatangan. We are planning to
construct a new palm oil mill at Sg. Silimpopon in Kalabakan, Tawau in 2010.
The Vision and Mission of Kretam Holdings Bhd is to become the best innovative, nature
friendly and Profitable Companys in this industry.
The career opportunity for this company is looking for suitably qualified candidates for the
positions in jobs.
7/28/2019 fa report(c) (1)
3/56
BACKGROUND OF COMPANY
Sarawak Plantation (SPB)
Sarawak Plantation (SPB) was incorporated in Malaysia on 28 October 1997 as a private
limited company under the name of Sarawak Plantation Sdn. Bhd. and commenced business in
the same year. SPB was converted into a public company on 1 February 2000 and assumed its
present name. SPB was specially incorporated as the vehicle company for the privatization of
Sarawak Land Development Boards (SLDB) assets. SPB is the only oil palm seed producer in
Sarawak and it owns and operates a seed garden. Its current annual production is around 1.4
million seeds and it targets to produce 5 million high quality seeds by 2014. These high quality
seeds are certified by SIRIM and are licensed for sale by the Malaysian Palm Oil Board (MPOB).
Apart from providing seeds for internal use, SPB also sells its seeds to other plantations and
smallholders.
The core business activities of the SPB Group are:
Development, cultivation and management of oil palm plantations ona large scale
Milling of fresh fruit bunches (FFB) into crude palm oil (CPO) and palmkernel (PK).
Plantation management services. Strategic investment to develop NCR land into oil palm plantations. Operation of a seed garden supplying high yielding seeds and
seedlings.
Providing laboratory and technical services for the oil palm industry.
7/28/2019 fa report(c) (1)
4/56
BACKGROUND OF COMPANY
Genting Plantations Berhad
Genting Plantations Berhad ("Genting Plantations"), formerly known as Asiatic
Development Berhad, is one of the fastest growing plantation companies listed on the Main
Board of Bursa Malaysia (formerly known as Kuala Lumpur Stock Exchange). Incorporated in
Malaysia as a private limited company on 29 September 1977, under the name of Asiatic
Development Sdn Bhd, it became a wholly owned subsidiary ofGenting Berhad ("Genting") on
22 February 1980 to spearhead Genting's plantation business.
Genting Plantations currently has about 133,000 hectares of plantation land (compared to
41,000 hectares in 2000) in Malaysia and Indonesia. Since its inception, Genting Plantations has
established itself as a reputable and reliable palm oil producer as well as one of the lowest-cost
palm oil producers in Malaysia. Whilst the plantation business remains its core activity, Genting
Plantations has also ventured into property development. The first project by Genting
Plantations's property arm, Genting Property Sdn Bhd is the 55-hectare Genting Cheng Perdana
in Central Melaka, which is near the tail-end of development.
Its second project is the 284-hectare Genting Permaipura in Kedah. Located in the
northern part of Malaysia near the town of Sungei Petani, this comprehensive township offers amix of commercial properties, bungalow lots, residential houses and an 18-hole golf course with
a clubhouse, The Genting Permaipura Golf & Country Club. Genting Pura Kencana Sri Gading
is the newest real estate project from Genting Property and is located near the town of Batu Pahat.
This project can be easily reached from Malaysias most comprehensive highway, the North -
South Expressway, and is located near amenities such as a hypermarket, malls and tertiary
institutions. Genting Plantations has also boldly ventured into the biotechnology industry.
In 2007, the company through subsidiary ACGT Sdn Bhd entered into a joint venture
with US-based Synthetic Genomics, Inc. In line with its aim to be a world-class centre of
excellence in genomic science in Malaysia, ACGT is receiving technical assistance from the
highly acclaimed US-based J. Craig Venter Institute to explore the use of genomics-based
techniques to improve yields and profit streams of oil palm.
http://www.genting.com.my/http://www.genting.com.my/7/28/2019 fa report(c) (1)
5/56
COMPLIANCE LEVEL OF THE COMPANY
FRS 117 LEASE
The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accountingpolicies and disclosure to apply in relation to leases.
This Standard shall be applied in accounting for all leases other than:
a. Leases to explore for or use minerals, oil, nature gas abd and similar non-regenerativeresources.
b. Licensing agreements for such items as motion picture films, video recordings,manuscripts, patents and copyright.
This Standard applies to agreements that transfer the right to use assets even though substantial
services by the lessor or may be called for in connection with the operation or maintenance of such
assets. This Standard does not apply to agreements that are contracts for services that do not transfer
the right to use assets from one contracting party to the other.
FRS 117 (Para35)Disclosure in the financial statements of lessees (Operating leases)
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) The total of future
minimum lease paymentsunder non-cancellable
operating leases for each of
the following periods:
Not later than oneyear;
Later than one yearbut not more than five
years; and
Later than five years;
X X
2) The total of futureminimum sublease
payments expected to be
received under non-cancellable subleases at the
balance sheet date
X X X
7/28/2019 fa report(c) (1)
6/56
3) Lease and subleasepayments recognized in theprofit and loss account for
the period, with separate
amounts for minimum
lease payments, contingentrents, and sublease
payments
X X
4) A general description ofthe leassees significantleasing arrangements
including, but not limited
to, the following:
The basis on whichcontingent rentpayments are
determined; The existence and
terms of renewal or
purchase options andescalation clauses; and
Restrictions imposedby lease agreements,
such as those
concerning dividends,
additional debt, andfurther leasing.
X X
FRS 117 (Para 31) Disclosure in the financial statements of lessees (Finance leases)
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd
1)
The net carrying amount ofeach major class of leased
assets at the balance sheetdate
X2) A reconciliation of the
minimum lease payments
at the balance sheet andtheir present value
X X
7/28/2019 fa report(c) (1)
7/56
3) The total of minimum leasepayments at the balancesheet date, and their
present value, for each of
the following period:
Not later than one year Later than one year but
not more than five
years;
Later than five years.
X X
4) Contingent rest recognizedin the profit and loss
account for the periodX NIL X
5) The total of futureminimum subleasepayments expected to be
received under non-
cancellable subleases at the
balance sheet date
X X
6) A general description ofthe lessees significant
leasing arrangements
including, but not limited
to the following:
The basis on whichcontingent rent
payments are
determined;
The existence andterms of renewal or
purchase options and
escalation clauses; and
Restrictions imposedby lease agreements,
such as those
concerning dividends,additional debts, andfurther leasing.
X
7/28/2019 fa report(c) (1)
8/56
FRS 117 (Para 56 & 57) Disclosure in the financial statements of lessors (Operating leases)
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) The future minimum lease
payments under non-cancellable operating
leases in the aggregate andfor each of the following
periods:
Not later than one year; Later than one year but
not more than fiveyears; and
Later than five years
X X
2) Total contingent rentsrecognised for the period.
X 3) A general description of
significant leasing
arrangements. X
4) Para 57 of FRS 117, forassets leased out underoperating leases, the
disclosure of:
The gross carryingamount;
The accumulateddepreciation;
The accumulatedimpairment losses;
The depreciationcharge of the period;
The impairment lossesrecognised for the
period; and
The impairment lossesreversed for the
period.
X X X
7/28/2019 fa report(c) (1)
9/56
FRS 117 (Para 45)Disclosure in the financial statements of lessors (Finance leases)
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) A reconciliation between
the gross investment in thelease at the balance sheet
date and the present valueof the minimum lease
payments receivable at the
balance sheet date
X X X
2) The total gross investmentin the lease and the presentvalue of the minimum
lease payments receivable
at the balance sheet date,
for each of the fallowingperiods:
Not later than one year; Later than one year but
not more than fiveyears;
Later than five years;
X X
3) Unearned finance income NIL NIL X4) The unguaranteed residual
values accruing to thebenefit of the lessor
X X X
5) The accumulatedallowance for uncollectiblelease receivable
X X X
6) Contingent rentsrecognized in income for
the period NIL X
7) A general description ofsignificant leasing
arrangements
7/28/2019 fa report(c) (1)
10/56
Kretam Holdings Bhd
FRS 117 (Para35)Disclosure in the financial statements of lessees (Operating leases)
1. The total of future minimum lease payments under non-cancellable operating leases foreach of the following periods:
Not later than one year; Later than one year but not more than five years; and Later than five years.
3. Lease and sublease payments recognized in the profit and loss account for the period, withseparate amounts for minimum lease payments, contingent rents, and sublease payments.
4. A general description of the leassees significant leasing arrangements including The existence and terms of renewal or purchase options and escalation clauses.
The total of future minimum sublease payments expected to be received under non-
cancellable subleases at the balance sheet date in FRS 117 Para 35 should be disclosure,
but the Kreatam Holdings Bhd do not prepared it.
7/28/2019 fa report(c) (1)
11/56
FRS 117 (Para 31) Disclosure in the financial statements of lessees (Finance leases)
1. The net carrying amount of each major class of leased assets at the balance sheet date.
2. A reconciliation of the minimum lease payments at the balance sheet and their presentvalue.
7/28/2019 fa report(c) (1)
12/56
3. The total of minimum lease payments at the balance sheet date, and their present value,for each of the following period:
Not later than one year Later than one year but not more than five years; Later than five years.
5. The total of future minimum sublease payments expected to be received under non-cancellable subleases at the balance sheet date.
6. A general description of the lessees significant leasing arrangements including The existence and terms of renewal or purchase options and escalation clauses
7/28/2019 fa report(c) (1)
13/56
FRS 117 (Para 56 & 57)Disclosure in the financial statements of lessors (Operating leases)
1. The future minimum lease payments under non-cancellable operating leases in theaggregate and for each of the following periods:
Not later than one year; Later than one year but not more than five years; and Later than five years
7/28/2019 fa report(c) (1)
14/56
2. Total contingent rents recognised for the period.
2.27Revenue
3. A general description of significant leasing arrangements.
Para 57 of FRS 117, for assets leased out under operating leases also did not disclosure the
gross carrying amount.
7/28/2019 fa report(c) (1)
15/56
FRS 117 (Para 45) Disclosure in the financial statements of lessors (Finance leases)
6. Contingent rents recognized in income for the period.7. A general description of significant leasing arrangements.
Kretam holdins Bhd dont have any unearned finance income.
7/28/2019 fa report(c) (1)
16/56
Sarawak Plantation (SPB)
FRS 117 (Para 31) Disclosure in the financial statements of lessees (Finance leases)
1. The net carrying amount of each major class of leased assets at the balance sheet date.
5. Contingent rest recognized in the profit and loss account for the period.
7/28/2019 fa report(c) (1)
17/56
6. A general description of the lessees significant leasing arrangements including, but notlimited to the following:
The basis on which contingent rent payments are determined; The existence and terms of renewal or purchase options and escalation clauses; and Restrictions imposed by lease agreements, such as those concerning dividends,
additional debts, and further leasing.
FRS 117 (Para 45) Disclosure in the financial statements of lessors (Finance leases)
7. A general description of significant leasing arrangements.
7/28/2019 fa report(c) (1)
18/56
Genting Plantations Berhad
FRS 117 (Para 56 & 57) Disclosure in the financial statements of lessors (Operating leases)
2. The Group does not recognise a contingent liability but discloses its existence in the financialstatements, except in a business combination.
No contingent or other liability of the Group or of the company has become enforceable, or is
likely to become enforceable within the period of twelve months after the end of the financial
year which, in the opinion of the Directors, will or may substantially affect the ability of the
Group or of the Company to meet their obligations as and when they fall due.
The Group does not recognise a contingent liability but discloses its existence in the financial
statements, except in a business combination.
7/28/2019 fa report(c) (1)
19/56
3. A general description of significant leasing arrangements.
FRS 117 (Para 45) Disclosure in the financial statements of lessors (Finance leases)
2. The total gross investment in the lease and the present value of the minimum lease paymentsreceivable at the balance sheet date, for each of the fallowing periods:
Not later than one year in year 2010; Later than one year but not more than five years in year 2009.
7/28/2019 fa report(c) (1)
20/56
7. A general description of significant leasing arrangements.
7/28/2019 fa report(c) (1)
21/56
Level of Compliance for FRS 117
As we can see from above, Kretam Holding has the highest level of compliance among
the company that we have studied with 65%, followed by Genting Plantation with 19% level of
compliance. The Sarawak Plantation has the lowest level of compliance with 16.7%.
0
10
20
30
40
50
60
70
Kretam Holding Sarawak Plantation Genting Plantation
FRS 117
Percentage %
7/28/2019 fa report(c) (1)
22/56
COMPLIANCE LEVEL OF THE COMPANY
FRS 136 IMPAIRMENT OF ASSETS
The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its
assets are carried at no more that their recoverable amount. An asset is carried at more than
recoverable amount if its carrying amount exceeds the amount to be recovered though use or sales
of the asset. If this is the case, the asset is described as impaired and the Standard requires the entity
to recognize an impairment loss. The Standard also specified when an entity should reverse an
impairment loss and prescribes disclosures
FRS 136 prescribes accounting and disclosure for impairment of assets. The objective is mainly to
ensure that assets are not carried in the balance sheet at amounts higher than their recoverable
amounts. Where there is impairment loss or reversal of impairment loss for the period, FRS 136,
Para 126 require the following disclosures for each class of assets:
FRS 136 (Para126)Impairment loss or reversal of impairment loss for the period
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation(SPB)
Genting
Plantations Bhd1) The amount of impairment
losses recognized in profit or
loss during the period and theline item of the incomestatement in which those
impairment losses are included.
X 2) The amount of reversals of
impairment losses recognized in
profit or loss during the periodand the line item of the income
statement in which those
impairment losses are reversed.
X NIL X
3) The amount of impairmentlosses recognized directly inequity during the period. X
4) The amount of reversals ofimpairment losses recognizeddirectly in equity during the
period.
X X X
7/28/2019 fa report(c) (1)
23/56
Kretam Holdings Bhd
FRS 136 (Para126)Impairment loss or reversal of impairment loss for the period
3. The amount of impairment losses recognized directly in equity during the period.
The amount of impairment losses is not recognized in profit or loss during the period, but is
recognized at Statement of Changes of Equity and the line items of impairment losses are
not included.
7/28/2019 fa report(c) (1)
24/56
7/28/2019 fa report(c) (1)
25/56
The amount of reversals of impairment losses is not recognized in profit or loss or in
equity during the period. That are recognized at Statement of Cash Flows, and the line
item for allowance for impairment and reversal of impairment looses is stated in above
notes.
7/28/2019 fa report(c) (1)
26/56
Sarawak Plantation (SPB)
FRS 136 (Para126)Impairment loss or reversal of impairment loss for the period
1) The amount of impairment losses recognized in profit or loss during the period and the lineitem of the income statement in which those impairment losses are included.
2)
The amount of reversals of impairment losses recognized in profit or loss during the periodand the line item of the income statement in
7/28/2019 fa report(c) (1)
27/56
Genting Plantations Berhad
FRS 136 (Para126)Impairment loss or reversal of impairment loss for the period
(1)and (3) impairment losses recognised in profit or loss on equity instruments classified asavailable for sale are reversed through other comprehensive income and not through profit
or loss.
Here are the explanation and amount of impairment loss for (1) and (3).
7/28/2019 fa report(c) (1)
28/56
Level of Compliance with FRS 136
As we can see from above, the level of compliance with frs 136 is the highest in the
Genting Plantation company with 50%, followed by Sarawak Plantation with 33%. The lowest
level of compliance goes to the Kretam Holding with 20%.
0
10
20
30
40
50
60
Kretam Holding Sarawak Plantation Genting Plantation
FRS 136
Percentage%
7/28/2019 fa report(c) (1)
29/56
COMPLIANCE LEVEL OF THE COMPANY
FRS 138 Intangible Assets
The objective of this Standard is to prescribe the accounting treatment for intangible assets that are
not dealt with specifically in another Standard. This Standard requires an entity to recognize
intangible assets if, and only if, specified criteria are met. The Standard also specie how to measure
the carrying amount of intangible assets and requires specifies disclosures about intangible assets.
This Standard shall be applied in accounting for intangible assets, except:
a. Intangible assets that are within the scope of another Standard.b. Financial assets, as defined in FRS 139 Financial Instruments: Recognition and
Measurement.c. The recognition and measurement of exploration and evaluation assets (see IFRS 6)
Exploration for and Evaluation of Mineral Resources.
d. Expenditure on the development and extraction of, mineral, oil natural gas and similarnon- regeneration resources.
FRS 138 (Para 118)Class of intangible assets, distinguishing between internally generated
intangible assets and other intangible asset
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) Whether the useful are
finite or indefinite, and if
finite, the useful lives or
the amortisation rates used.
X 2) The amortisation methods
used for intangible assets
with finite useful lives. X
3) The gross carrying amountand the accumulatedamortization (aggregated
with accumulated
impairment losses) at thebeginning and end of the
period.
X
7/28/2019 fa report(c) (1)
30/56
4) The line item of the incomestatement in which theamortisation of assets
included.
X X X
5) A reconciliation of thecarrying amount at thebeginning and end of the
period.
Additions, indicatingseparately those from
internal development,
those acquired
separately and thoseacquired through
business combinations;
Assets classified asheld for sale, and otherdisposals;
Increases or decreasesduring the periodresulting from
revaluations and from
impairment losses
recognized or reverseddirectly in equity;
Impairment lossesrecognized in the
income statementduring the period under
FRS 136;
Impairment lossesreversed in the incomestatement during the
period under FRS 136;
Any amortizationrecognised during the
period;
Net exchangedifferences arising onthe translation of the
financial statements ofa foreign entity; and
Other changes in thecarrying amount duringthe period.
X
7/28/2019 fa report(c) (1)
31/56
FRS 138 (Para 122)Additional disclosure requirement
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd
1) For an intangible assetassessed as having anindefinite useful life, the
carrying amount of that
asset and the reasonssupporting the assessment
of an indefinite useful life.
In giving these reasons, the
entity shall describe thefactor(s) that played a
significant role in
determining that the assethas an indefinite useful
life.
X X
2) A description, the carryingamount and remaining
amortisation period of any
individual intangible asset
that is material to theentity's financial
statements.
NIL X X
3) For intangible assetsacquired by way of a
government grant and
initially recognized at fair
value:
The fair value initiallyrecognized for these
assets;
Their carrying amount;and
Whether they aremeasured afterrecognition under the
cost model or therevaluation model.
X X
4) The existence and carryingamounts of intangible
assets whose title is
7/28/2019 fa report(c) (1)
32/56
restricted and the carrying
amounts of intangibleassets pledged as security
for liabilities.
NIL X X
5) The amount of contractualcommitments for theacquisition of intangibleassets.
X X
FRS 138 (Para 124) Additional disclosure for intangible assets are carried at revalued
amounts
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) By class of intangible
assets:
a) The effective date ofthe revaluation;
b) The carrying amount ofrevalued intangible
assets; and
c) The carrying amountthat would have been
included in the
financial statementshad the revalued
intangible assets been
measured using thecost model.
X X
2) The amount of therevaluation surplus that
relates to intangible assets
at the beginning and end of
the period, indicating thechanges during the period
and any restrictions on thedistribution of the balanceto shareholders.
X
3) The methods andsignificant assumptions
applied in estimating the
assets fair values.
NIL X X
7/28/2019 fa report(c) (1)
33/56
Kretam Holdings Bhd
FRS 138 (Para 118) Class of intangible assets, distinguishing between internally
generated intangible assets and other intangible asset
1. Whether the useful are finite or indefinite, and if finite, the useful lives or the amortisationrates used.
2. The amortisation methods used for intangible assets with finite useful lives.3. The gross carrying amount and the accumulated amortization (aggregated with accumulated
impairment losses) at the beginning and end of the period.
7/28/2019 fa report(c) (1)
34/56
5. A reconciliation of the carrying amount at the beginning and end of the period. Additions, indicating separately those from internal development, those acquired
separately and those acquired through business combinations;
Assets classified as held for sale, and other disposals; Increases or decreases during the period resulting from revaluations and from impairment
losses recognized or reversed directly in equity;
Impairment losses recognized in the income statement during the period under FRS 136; Impairment losses reversed in the income statement during the period under FRS 136; Any amortization recognised during the period; Net exchange differences arising on the translation of the financial statements of a
foreign entity; and
Other changes in the carrying amount during the period.
The line item of the income statement in which the amortisation of assets are not included in
annual report for Kretam Holdings Bhd.
FRS 138 (Para 122) Additional disclosure requirement
1. For an intangible asset assessed as having an indefinite useful life, the carrying amount ofthat asset and the reasons supporting the assessment of an indefinite useful life. In giving
these reasons, the entity shall describe the factor(s) that played a significant role in
determining that the asset has an indefinite useful life.
7/28/2019 fa report(c) (1)
35/56
3. For intangible assets acquired by way of a government grant and initially recognized at fairvalue:
The fair value initially recognized for these assets; Their carrying amount; and Whether they are measured after recognition under the cost model or the revaluation
model.
5. The amount of contractual commitments for the acquisition of intangible assets.
7/28/2019 fa report(c) (1)
36/56
FRS 138 (Para 124) Additional disclosure for intangible assets are carried at revalued
amounts
1. By class of intangible assets:d) The effective date of the revaluation;e) The carrying amount of revalued intangible assets; andf) The carrying amount that would have been included in the financial statements had the
revalued intangible assets been measured using the cost model.
2. The amount of the revaluation surplus that relates to intangible assets at the beginning andend of the period, indicating the changes during the period and any restrictions on the
distribution of the balance to shareholders.
7/28/2019 fa report(c) (1)
37/56
Sarawak Plantation (SPB)
FRS 138 (Para 118) Class of intangible assets, distinguishing between internally
generated intangible assets and other intangible asset
7/28/2019 fa report(c) (1)
38/56
Genting Plantations Berhad
FRS 138 (Para 118) Class of intangible assets, distinguishing between internally
generated intangible assets and other intangible asset
1. Whether the useful are finite or indefinite, and if finite, the useful lives or theamortisation rates used.
For finite useful life;
Evidence of amortisation occurred but it did not state the rate of amortisation:
7/28/2019 fa report(c) (1)
39/56
For indefinite useful life
2. Capitalised development costs are recorded as intangible assets and amortised from thepoint at which the asset is ready for use or sale, on a straight-line basis over useful life,
not exceeding twenty years.
The amortisation methods used for intangible assets with finite useful lives.
7/28/2019 fa report(c) (1)
40/56
3. The gross carrying amount and the accumulated amortization (aggregated with accumulatedimpairment losses) at the beginning and end of the period.
5. A reconciliation of the carrying amount at the beginning and end of the period. (increase in 2010)
7/28/2019 fa report(c) (1)
41/56
FRS 138 (Para 124) Additional disclosure for intangible assets are carried at revalued
amounts
2. The amount of the revaluation surplus that relates to intangible assets at the beginningand end of the period.
7/28/2019 fa report(c) (1)
42/56
Level of Compliance with FRS 138
As shown above, Kretam Holding has the highest level of compliance with FRS 138 with
a percentage of 90%, followed by Genting Plantation with a percentage of 38%. Sarawak
Plantation did not comply at all with FRS138. This is clearly stated in the notes that is included
for the financial statement.
0
10
20
30
40
50
60
70
80
90
100
Kretam Holding Sarawak Plantation Genting Plantation
FRS 138
Percentage %
7/28/2019 fa report(c) (1)
43/56
COMPLIANCE LEVEL OF THE COMPANY
FRS 140 INVESTMENT PROPERTY
The Objective of this Standard is to prescribe the accounting treatment for investment property and
related disclosures requirements.
FRS 140 defines Investment Property as land or a building or part of building or land and building
held (by the owner or under finance lease) to earned rental or for capital appreciation or both.
Investment Property:
Land held for long -term (>5yrs) capital appreciation-ex land for housing, public utilities etc.
land held for undetermined future use - ex remote land for plantation building owned building that is vacant but is held to be leased out under operating leased
FRS 140 (Para 75) For all investment property
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) Whether the cost model or
the fair value model is
used.
2) If the fair value model isused, whether, and in what
circumstances, propertyinterest held under
operating leases are
classified and accounted
for as investment property.
NIL NIL X
3) When classification isdifficult, the criteria usedto identify investment
properties.
X 4) The methods and
significant assumptions
applied in estimating thefair value of investment
property.
NIL
7/28/2019 fa report(c) (1)
44/56
5) The extent to which fairvalue is based on valuationby an independent
professional valuer.
NIL 6) The amount included in the
income statements for: (i)rental income;(ii)directoperating expenses arising
from investment property
that generate rental incomeduring the period and
(iii)direct operating
expenses arising from
investment property thatdid not generate rental
income during the period.
NIL
7)
Material contractualobligation. NIL X X
FRS 140 (Para 79) Additional disclosure requirements for cost model
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) The depreciation method
used.
2) The useful lives or the
depreciation rates used.
3) The gross carrying amountand the accumulated
depreciation (together withaccumulated impairment
losses) at the beginning
and end of the period.
NIL
4) A reconciliation of thecarrying amount of
investment property at thebeginning and end of the
period.
NIL5) The fair value of the
investment property. NIL
7/28/2019 fa report(c) (1)
45/56
FRS 140 (Para 76) Additional disclosure requirements for fair value model
Disclosure Requirement Kretam
Holdings BhdSarawak
Plantation (SPB)Genting
Plantations Bhd1) Reconciliation of the
carrying amount ofinvestment property at the
beginning and end of the
period
NIL
FRS 140 (Para 78) For investment property the fair value model but its fair value cannot be
measured reliably
Disclosure Requirement Kretam
Holdings Bhd
Sarawak
Plantation (SPB)
Genting
Plantations Bhd1) A description of the
property. NIL NIL
2) An explanation why fairvalue cannot be determined
reliably.NIL NIL X
3) If possible, the range ofestimates within which fair
value is highly likely to lie.NIL NIL X
4) Upon disposal, the carryingamount and the gain or loss
arising there form. NIL NIL
7/28/2019 fa report(c) (1)
46/56
Kretam Holdings Bhd
FRS 140 (Para 75) For all investment property
1. Whether the cost model or the fair value model is used.
6. When classification is difficult, the criteria used to identify investment properties.7. The methods and significant assumptions applied in estimating the fair value of investment
property.
FRS 140 (Para 79)
Additional disclosure requirements for cost model
1. The depreciation method used.2. The useful lives or the depreciation rates used.
7/28/2019 fa report(c) (1)
47/56
3. The gross carrying amount and the accumulated depreciation (together with accumulatedimpairment losses) at the beginning and end of the period.
4. A reconciliation of the carrying amount of investment property at the beginning and end ofthe period.
5. The fair value of the investment property.
FRS 140 (Para 76) Additional disclosure requirements for fair value model
1.
Reconciliation of the carrying amount of investment property at the beginning and end of theperiod
7/28/2019 fa report(c) (1)
48/56
FRS 140 (Para 78) For investment property the fair value model but its fair value cannot
be measured reliably
1. A description of the property.
4. Upon disposal, the carrying amount and the gain or loss arising there form.
7/28/2019 fa report(c) (1)
49/56
Sarawak Plantation (SPB)
FRS 140 (Para 75) For all investment property
1. Whether the cost model or the fair value model is used
5. The extent to which fair value is based on valuation by an independent professionalvaluer.
6. The amount included in the income statements for:I. Rental income
II. Direct operating expenses arising from investment property that generate rentalincome during the period and
III. Direct operating expenses arising from investment property that did not generaterental income during the period.
7/28/2019 fa report(c) (1)
50/56
FRS 140 (Para 79) Additional disclosure requirements for cost model
1. The depreciation method used
2. The useful lives or the depreciation rates used.
3. The gross carrying amount and the accumulated depreciation (together with accumulatedimpairment losses) at the beginning and end of the period.
7/28/2019 fa report(c) (1)
51/56
4. A reconciliation of the carrying amount of investment property at the beginning and endof the period
5. The fair value of the investment property.
7/28/2019 fa report(c) (1)
52/56
Genting Plantations Berhad
FRS 140 (Para 75) For all investment property
1. Whether the cost model or the fair value model is used. (Both) Cost Model:
Fair Model
7/28/2019 fa report(c) (1)
53/56
3. Investment properties under construction before 1 January 2010 were classified asproperty, plant and equipment and measured at cost. Following to the amendment made
to FRS 140, such properties are treated as investment property and accounted as such
retrospectively.
When classification is difficult, the criteria used to identify investment properties.
4. The fair values of the investment properties were based on valuation by independentprofessional qualified valuers. Valuations were based on sales of comparable
properties in the vicinity. The methods and significant assumptions applied in
estimating the fair value of investment property.
5. The fair values of the investment properties were based on valuation by independentprofessional qualified valuers. Valuations were based on sales of comparable
properties in the vicinity. The extent to which fair value is based on valuation by an
independent professional valuer.
7/28/2019 fa report(c) (1)
54/56
6. The amount included in the income statements for:(i) rental income;
(ii)direct operating expenses arising from investment property that generate rental
income during the period
FRS 140 (Para 79)
Additional disclosure requirements for cost model
1. Depreciation for other investment properties is calculated using the straight-linemethod to allocate their costs over their estimated useful lives. The depreciation
method used.
2. The useful lives or the depreciation rates used.
7/28/2019 fa report(c) (1)
55/56
FRS 140 (Para 76) Additional disclosure requirements for fair value model
1. Reconciliation of the carrying amount of investment property at the beginning andend of the period,
7/28/2019 fa report(c) (1)
56/56
Level of Compliance with FRS 140
As shown above, Kretam Holding has the highest level of compliance with FRS 140
among the company that was studied with a 100%,followed by Sarawak Plantation with 80%.
The lowest compliance to FRS 140 goes to Genting Plantation with a percentage of 67%.
Conclusion
Overall, the highest compliance to all the FRS that we have studied among the company
that we have researched on goes to the Kretam Holding. This is followed by Sarawak Plantation
and finally Genting Plantation.
Through this research, we have found that the level of compliance to FRS is completely
in the hand of the company. Even if disclosure of a particular item is required by FRS, but if the
0
20
40
60
80
100
120
Kretam Holding Sarawak Plantation Genting Plantation
FRS 140
Percentage %