Q1 Financial Report - 2011

Ag Growth International Inc.
NOTES TO UNAUDITED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
[in thousands of Canadian dollars, except where otherwise noted and per share data]
March 31, 2011
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as
follows:
Buildings and building components
Manufacturing equipment
Computer hardware
Leasehold improvements
Equipment under finance leases
Furniture and fixtures
Vehicles
20 to 60 years
10 to 20 years
5 years
Over the lease period
10 years
5 to 10 years
4 to 16 years
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition of the asset is included in the statement of
income when the asset is derecognized.
The assets' useful lives and methods of depreciation of assets are reviewed at each financial year
end, and adjusted prospectively, if appropriate. No depreciation is taken on construction in
progress until the asset is placed in use. Amounts representing direct costs incurred for major
overhauls are capitalized and depreciated over the estimated useful life of the different
components replaced.
Leases
The determination of whether an arrangement is, or contains, a lease is based on whether
fulfillment of the arrangement is dependent on the use of a specific asset or assets or the
arrangement conveys a right to use the asset.
Finance leases, which transfer to Ag Growth substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the commencement of the lease at the fair value of
the leased property or, if lower, at the present value of the minimum lease payments. Lease
payments are apportioned between finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
recognized in finance costs in the statement of income.
Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable
certainty that Ag Growth will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful life of the asset and the lease term.
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