BIMB Integrated Annual Report 2019

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2.7 Investment property (continued) (ii) Reclassifications to/from investment property carried at amortised costs When an item of property and equipment is transferred to investment property following a change in its use, the carrying amount of the item is reclassified to investment property as the Group adopts the cost model for investment property. 2.8 Intangible assets Intangible assets that are acquired by the Group have finite useful lives and are measured at cost less any accumulated amortisation and any accumulated impairment losses. Cost associated with maintaining computer software programmes are recognised as an expenses as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred. Amortisation Intangible assets are amortised from the date that they are available for use. Amortisation is based on cost of an asset less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets. The estimated useful lives for the current periods are as follows: Bancatakaful service fees 5 years Computer softwares 5 years Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted, if appropriate. 2.9 (i) Lessee accounting – Policy applicable after 1 January 2019 For any new contracts entered into on or after 1 January 2019, the Group and the Company consider whether a contract is, or contains a lease. A lease is defined as “a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration”. To apply this definition, the Group and the Company assesses whether the contract meets three key evaluations which are whether: • the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group or the Company; • the Group or the Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; or • the Group or the Company has the right to direct the use of the identified asset throughout the period of use. The Group and the Company assesses whether it has the right to direct “how and for what purpose” the asset is used throughout the period of use. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 195 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary