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Note 1 Significant Accounting Policies
(continued)
property. Investment property is measured at its acquisition cost, including related transaction costs and where applicable,
borrowing costs.
j) Impairment of assets:
The carrying amount of assets are reviewed at each Balance Sheet date to assess if there is any indication of impairment
based on internal | external factors. An impairment loss on such assessment is recognised wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling price or value in use,
whichever is higher. While assessing value in use, the estimated future cash flows are discounted to the present value by
using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending
on changes in the circumstances and to the extent that carrying amount of the assets does not exceed the carrying amount
that will be determined if no impairment loss had previously been recognised.
k) Cash and cash equivalents:
Cash and cash equivalents include cash in hand, demand deposits with bank and other short-term (3 months or less
from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an
insignificant risk of changes in value.
l) Trade receivables:
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the
Effective Interest Rate (EIR) method, less provision for impairment based on expected credit loss.
m) Trade and other payables:
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which
are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after
the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the
EIR method.
n) Inventories:
Inventories (other than harvested product of biological assets) are stated at cost or net realisable value, whichever is lower.
Cost is determined on moving weighted average basis.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs
necessary to make the sale.
Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present
location and condition. Cost includes the reclassification from equity of any gains or losses on qualifying cash flow hedges
relating to purchases of raw material, but excludes borrowing costs.
Due allowances are made for slow moving and obsolete inventories based on estimates made by the Company.
Items such as spare parts, stand-by equipment and servicing equipment which are not plant and machinery get classified
as inventory.
The harvested product of biological assets of the Company that is oil palm Fresh Fruit Bunch (FFB) is initially measured
at fair value less costs to sell on the point of harvest and subsequently measured at the lower of such value or net
realisable value.
o) Investments and other financial assets:
Classification:
The Company classifies its financial assets in the following measurement categories:
i)
Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit
or loss)
ii) Those measured at amortised cost
The classification depends on business model of the Company for managing financial assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income.
Notes
to the Financial Statements