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Annual Report 2020
154
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 (cont’d.)
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.
(h) 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.
(i)
Investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation
or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and any accumulated
impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated.
Depreciation of investment properties is provided for on a straight-line basis to write-off the cost of the
property to its residual value over its estimated useful life, at the following annual rates:
Freehold building
2%
Leasehold building
2% to 3%
Leasehold land
Over lease period
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure
that the amount, method and period of depreciation are consistent with previous estimates and the expected
pattern of consumption of the future economic benefits embodied in the investment property.
An investment property is derecognised when either it has been disposed of or when the investment property
is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or
losses on the retirement or disposal of an investment property are recognised in the profit or loss in the year
in which they arise.