FORGING AHEAD - Tradewinds Plantation Berhad

112
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2010
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3 Property, plant and equipment and depreciation (continued)
Freehold land is not depreciated as it has an infinite life. Capital work-in-progress represents buildings, access roads
under construction and machineries under installation and is stated at cost. Capital work-in-progress is not depreciated
until such time when the asset is available for use.
At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for
impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A
write down is made if the carrying amount exceeds the recoverable amount (see Note 4.9 to the financial statements
on impairment of non-financial assets).
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. If expectations
differ from previous estimates, the changes are accounted for as a change in an accounting estimate. The Group
anticipates that the residual values of its property, plant and equipment will not be significant.
The carrying amount of an item of property, plant and equipment is derecognised on 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 carrying amount is included in profit or loss.
4.4 Plantation development expenditure
Mature plantations are stated at cost less accumulated amortisation and any accumulated impairment losses where the
recoverable amount of the asset is estimated to be lower than its carrying amount. Amortisation is charged to profit or
loss so as to write off the cost of mature plantations, using the straight-line method, over the estimated useful lives of 25
years, representing the economic useful lives of the crops.
Costs incurred in the preparation of the nursery, purchase of seedlings and their maintenance are stated at cost. The
accumulated costs will be transferred to plantation development expenditure at the time of planting.
Immature plantations are stated at cost. The costs of immature plantations consist mainly of the accumulated cost of
land clearing, planting, fertilising and maintaining the plantation, borrowing costs and other indirect overhead costs
up to the time the trees are harvestable and to the extent appropriate.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010