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Annual Report 2017
139
Notes to the
financial statements
31 march 2017
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(f)
Biological assets
(i)
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 - 25 years.
Replanting expenditure and nursery assets is capitalised under oil palm planting expenditure in the year in
which it is incurred until maturity.
(ii)
Pineapple planting expenditure
New estate development expenditure is capitalised until the plants attain maturity, after which time the
amount capitalised will be charged to the profit or loss based on the area harvested. Replanting expenditure
consists of expenses incurred from the stage of clearing to maturity. Replanting expenditure is capitalised
and will be charged to the profit or loss based on area harvested upon attaining maturity.
(g)
Foreign currencies
(i)
Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The consolidated financial
statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.
(ii)
Foreign currency transactions
Transactions in foreign currencies other than the Company’s functional currency (foreign currencies) are
recorded in the functional currencies at exchange rates approximating those ruling at the transaction dates. At
each reporting date, monetary items denominated in foreign currencies are translated at the rates prevailing
on the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies
are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items
that are measured in terms of historical cost in a foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items,
are included in the profit or loss for the period except for exchange differences arising on monetary items that
form part of the Group’s net investment in foreign operation. These are initially taken directly to the foreign
currency translation reserve within equity until the disposal of the foreign operations, at which time they are
recognised in profit or loss. Exchange differences arising on monetary items that form part of the Company’s
net investment in foreign operation are recognised in profit or loss in the Company’s separate financial
statements or the individual financial statements of the foreign operation, as appropriate.