200901023978 (867077-X) Kimlun Corporation Berhad (Incorporated in Malaysia) 2. Material accounting policy information (cont'd) 2.14 Inventories - Raw materials: purchase costs on a first-in first-out basis. - - 2.15 Right-of-use assets and lease liabilities (a) Short-term leases and leases of low-value assets (b) Right-of-use assets (c) Lease liabilities The Group and the Company apply the "short-term lease" and "lease of low-value assets" recognition exemption. For these leases, the Group and the Company recognise the lease payments as an operation expense on a straight-line method over the term of the lease unless another systematic basis is more appropriate. Right-of-use assets are initially measured at cost. Subsequent to the initial recognition, the right-of-use assets are stated at cost less accumulated depreciation and any accumulated impairment losses, and adjusted for any remeasurement of lease liabilities. Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the entities' incremental borrowing rate. Subsequent to the initial recognition, the lease liabilities are measured at amortised cost and adjusted for any lease reassessment or modifications. The right-of-use assets are depreciated using the straight-line method from the commencement date to the end of the estimated useful lives of their right-of-use assets or the end of the lease term, whichever is earlier. Finished goods: costs of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. These costs are assigned on a first-in firstout basis. Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows: Completed properties; cost is determined on specific identification basis and comprises cost associated with the acquisition of land, construction costs and appropriate proportion of development overheads. - 33 - NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 125 ANNUAL REPORT 2024
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