122 / 204
Notes To The
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(e) Property, plant and equipment (cont’d.)
Other property, plant and equipment is depreciated on a straight-line basis to write-off the cost of
each asset to its residual value over the estimated useful life, at the following annual rates:
Leasehold land
Over lease period
Buildings
2% to 10%
Plant and machinery
10% to 50%
Factory and office renovations
2% to 20%
Equipment, furniture and fittings and motor vehicles
10% to 33.3%
Bearer plants and infrastructure
4%
Assets under construction or capital work-in-progress included in property, plant and equipment are
not depreciated as these assets are not yet available for use. Immature plantations, which in general
are mature 36 months after field planting are not depreciated until maturity.
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and
adjusted prospectively if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is
included in the profit or loss in the year the asset is derecognised.
(f) Biological assets
Biological assets comprise produce growing on bearer plants. Biological assets are classified as
current assets for bearer plants that are expected to be harvested and sold or used for production
on a date not more than 15 days after the reporting date.
Biological assets are measured at fair value less costs to sell. Any gains or losses arising from
changes in the fair value less costs to sell are recognised in profit or loss. Fair value is determined
based on the present value of expected net cash flows from the biological assets. The expected net
cash flows are estimated using the expected output (FFB harvest) and market price at reporting
date of crude palm oil and palm kernel adjusted for extraction rates less processing, harvesting and
transportation costs.
(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.
118
Fima Corporation Berhad
(21185-P)
Annual Report 2019