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CHAIRMAN’S DELIVERING MSM MANAGEMENT DISCUSSION GROUP FINANCIAL
STATEMENT VALUE OVERVIEW & ANALYSIS REPORT

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Intangible assets (continued)
Intangible assets with indefinite useful lives and intangible assets under development are not amortised but tested for
impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may
be impaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefinite
life is also reviewed annually to determine whether the useful life assessment continues to be supportable.

Intangible assets are amortised using the straight line basis over their estimated useful lives as follows:
Intangible assets Estimated useful lives
148 Brand 25 years
Software 3 - 5 years
MSM MALAYSIA HOLDINGS BERHAD Annual Report 2020
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.