sniffs its rns march 26 this year27 Apr 2015 15:19
2. Significant accounting policies (continued)
(g) Biological Assets
Biological assets comprise oil palm, rubber, pineapple and cacao trees from initial preparation of land and planting of seedlings through to maturity and the entire productive life of the trees.
All costs comprising mainly land clearing, land terracing and drainage, planting, weeding and fertilising involved during the immature period until the trees are ready for commercial harvesting at approximately 0 - 3 years for oil palm, cacao and pineapple and 0-7 years for rubber, are capitalised. Plantation development costs comprise all rehabilitated plantation development costs such as direct materials, labour and an appropriate proportion of fixed overheads.
Oil palm, rubber, pineapple and cacao produce is measured at fair value with any change in fair value recognised in the income statement. The bearing plant of each type of produce is recognised at cost and depreciated over its useful economic life.
Under IAS 41 bearer plants are defines as an asset which:
· is used in the production or supply of agricultural produce;
· is expected to bear produce for more than one period; and
· has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.
Capitalised development costs will be subject to accelerated depreciation if the existing planted area has been earmarked for replanting with a different crop, after writing down the carrying amount to its recoverable amount.
Replanting expenses are charged to profit or loss in the year in which they are incurred.
Where an indication of impairment exists, the carrying amount of the biological asset is assessed and written down immediately to its recoverable amount.
Sign In
Follow the stocks
