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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.)
(f) Foreign currencies (cont’d.)
(iii) Foreign operations (cont’d.)
The results and financial position of foreign operations that have a functional currency different
from the presentation currency, RM of the consolidated financial statements are translated into
RM as follows: (cont’d.)
-
All resulting exchange differences are taken to the foreign currency translation reserve
within equity.
(g) Property, plant and equipment and depreciation
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 Company 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 and maintenance, 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 and the Company recognises such parts
as individual assets with specific useful life and depreciation, respectively. Likewise, when a major
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.
financial
statements
133