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(11817-V) |

Annual Report



2.3 Summary of Significant Accounting Policies (Cont’d)

(e) Goodwill

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.