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Annual Report 2020
153
Notes to the Financial Statements
As at 31 March 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(g) 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 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 aremeasured 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. 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:
Buildings
2.0% - 10.0%
Plant and machinery
4.0% - 33.3%
Bearer plant and infrastructure
4.0%
Fish canning facilities
2.0%
Warehouses, storage tanks and pipelines
4.0%
Motor vehicles
10.0% - 33.3%
Office equipment, furniture and fittings
6.7% - 25.0%
Renovations
10.0% - 20.0%
Tools, accessories and computer equipment
20.0% - 33.3%
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.