KUMPULAN FIMA BERHAD
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Summary of Significant Accounting Policies (Cont’d)
Goodwill acquired in a business combination is initially measured at cost being the excess of
the cost of business combination over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at
cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed
for impairment, annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(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.