Registration No. 200301030845 (633265-K) - 33 - 2. Basis of Preparation (Cont’d) (c) Significant accounting judgements, estimates and assumptions (Cont’d) Determining the lease term of contracts with renewal and termination options - as lessee (Cont’d) The Group and the Company include the renewal period as part of the lease term for leases of land and building with non-cancellable period included as part of the lease term as these are reasonably certain to be exercised because there will be a significant negative effect on operation if a replacement asset is not readily available. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised. Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period are set out below: Useful lives / depreciation of property, plant and equipment, right-of-use (“ROU”) assets and intangible assets The Group and the Company regularly review the estimated useful lives of property, plant and equipment and ROU assets based on factors such as business plan and strategies, expected level of usage and future technological developments. Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned above. A reduction in the estimated useful lives of property, plant and equipment, ROU assets and intangible assets would increase the recorded depreciation and decrease the value of property, plant and equipment, ROU assets and intangible assets. The carrying amounts at the reporting date for property, plant and equipment, ROU assets and intangible assets are disclosed in Notes 4, 5 and 8 respectively. NOTES TO THE FINANCIAL STATEMENTS DESTINI BERHAD 146 ANNUAL REPORT 2026
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