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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110) (21185-P) •
Annual Report 2020
126
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(d) Investment in associate companies (cont’d.)
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there
is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the
amount of impairment as the difference between the recoverable amount of the associate and its carrying value and
recognises the amount in profit or loss.
The financial statements of the associate are prepared as of the same reporting date as the Company. Where necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
In the Company’s separate financial statements, investments in associate are stated at cost less impairment losses. On
disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in
profit or loss.
(e) Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and
equipment is recognised as an asset, if and only if, it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably.
Bearer plants are living plants used in the production or supply of agricultural produce; are expected to bear produce
for more than one period; and have a remote likelihood of being sold as agricultural produce, except for incidental
scrap sales.
Bearer plants mainly include mature and immature oil palm plantations. Immature plantations includes costs incurred for
field preparation, planting, fertilising andmaintenance, capitalisation of borrowing costs incurred on loans used to finance
the developments of immature plantations and an allocation of other indirect costs based on planted hectares.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced
in intervals, the Group recognises such parts as individual assets with specific useful life and depreciation, respectively.
Likewise, when amajor inspection is performed, its cost is recognised in the carrying amount of the plant and equipment
as a replacement if the recognition criteria is satisfied. All other repair and maintenance costs are recognised in profit or
loss as incurred.
Freehold land has an unlimited useful life and therefore is not depreciated. Land held on long lease is held on a lease
with an unexpired period of 50 years or more. Mature plantations are depreciated on a straight line basis and over its
estimated useful life of 25 years, upon commencement of commercial production.
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: