MSM Malaysia Holdings Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Intangible assets (continued) Intangible assets are amortised using the straight line basis over their estimated useful lives as follows: Intangible assets Estimated useful lives Brand 25 years Software 3 - 5 years Amortisation on intangible assets under development commences when the assets are ready for their intended use. The nature of the intangible assets are as follows: (i) Brand is related to a sugar brand ‘Prai’ acquired as part of the acquisition of the sugar business. (ii) Software relates to information technology (“IT”) used within the Group. (f) Financial assets Classification The Group classifies its financial assets in the following categories: (i) those to be measured subsequently at fair value (either through profit or loss or other comprehensive income); and (ii) those to be measured at amortised cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (“FVOCI”). The Group reclassifies debt investments when and only when its business model for managing those assets changes. Recognition and derecognition Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. 131 FINANCIAL STATEMENTS 08