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FIMA CORPORATION BERHAD
(21185-P) |
Annual Report
2016
NOTES TO THE FINANCIAL
STATEMENTS 31 MARCH 2016
(contd.)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONTD.)
2.3 Summary of Significant Accounting Policies (Contd.)
(f) Biological Assets - Oil Palm Planting Expenditure
All expenses incurred in land preparation, planting and developing of oil palm up to maturity are
capitalised as biological assets. A portion of the indirect overheads which include general and
administrative expenses incurred on immature plantation is similarly capitalised under biological
assets until such time when the plantation attains maturity at the age of 36 months. All expenses
subsequent to maturity are recognised in the profit or loss. Upon attaining maturity, oil palm
planting expenditure is amortised over 20 years. Replanting expenditure and nursery assets are
capitalised under oil palm planting expenditure in the year in which they are incurred until maturity.
(g) Investment Properties
Investment properties are properties which are held either to earn rental income or for capital
appreciation or for both. Such property is measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment property except for freehold land is stated at cost
less accumulated depreciation and any accumulated impairment losses. Freehold land has an
unlimited useful life and therefore is not depreciated.
Depreciation of investment properties is provided for on a straight-line basis to write off the cost of
the property to its residual value over its estimated useful life, at the following annual rate:
Freehold building
2%
Leasehold building
2% to 3%
Leasehold land
Over lease period
The residual values, useful life and depreciation method are reviewed at each financial year-
end to ensure that the amount, method and period of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic benefits embodied in
the investment property.
An investment property is derecognised when either it has been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from
its disposal. Any gains or losses on the retirement or disposal of an investment property are
recognised in the profit or loss in the year in which they arise.
(h) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of
the cost of business combination over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at
cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed
for impairment, annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.