Directors - Boustead Holdings Berhad

(f) PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION (cont’d.)
The residual values, useful lives and depreciation method are reviewed at each financial year end to
ensure that the amount, method and period of depreciation are consistent with previous estimates and
the expected pattern of consumption of the future economic benefits embodied in the items of property,
plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any
and the net carrying amount is recognised in the income statement and the unutilised portion of the
revaluation surplus on that item is taken directly to retained earnings.
(g) BIOLOGICAL ASSETS
The expenditure on new planting and replanting of a different produce crop incurred up to the time of
maturity is capitalised while the initial costs of planting on the area replanted are charged to the income
statement. Depreciation charges and external borrowing costs related to the development of new
plantations are included as part of the capitalisation of immature planting costs. Replanting expenditure
incurred in respect of the same crop is charged to the income statement in the year in which it is
incurred. Plantation development expenditure is not amortised other than for those planted on short term
leases held in Indonesia which are amortised over the life of the leases.
(h) INVESTMENT PROPERTIES
Investment properties are properties which are held either to earn rental income or for capital
appreciation or both. Such properties are measured initially at cost, including transaction costs, and
thereafter are stated at fair value, which is determined by Directors by reference to market evidence of
transaction prices for similar properties, and valuation performed by registered independent valuers
having an appropriate recognised professional qualification and recent experience in the location and
category of the properties being valued. Gains or losses arising from changes in the fair values of
investment properties are included in the income statement in the year in which they arise.
Investment properties are derecognised when either they have been disposed or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from the
disposal. Any difference between the net disposal proceeds and the carrying amount is charged or
credited to profit or loss in the year in which they arise.
(i) DEVELOPMENT PROPERTIES AND PROPERTY DEVELOPMENT IN PROGRESS
(i) Development properties
Development properties are stated at cost less any accumulated impairment losses. Development
properties comprise land banks which are in the process of being prepared for development but
are not expected to be launched for sale. Cost includes land, materials, direct labour, professional
fees, borrowing costs and other direct development cost and related overheads.
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