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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110)
(21185-P)
• Annual Report 2020
127
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(e) Property, plant and equipment (cont’d.)
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.