FORGING AHEAD - Tradewinds Plantation Berhad

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments used in preparing the financial statements are continually evaluated by the Directors and are based
on historical experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
6.1 Critical judgments made in applying accounting policies
The following are critical judgments made by management in the process of applying the Group’s accounting policies
that have a significant effect on the amounts recognised in the financial statements.
(a) Non-current assets held for sale
Certain non-current assets and liabilities have been classified as non-current assets held for sale as the management
has committed to a plan to sell the assets and liabilities as at the end of the reporting period. Barring any
unforeseen circumstances, the Group expects that the sale of the assets and liabilities to be completed within the
next twelve (12) months.
(b) Contingent liabilities
Determination of the treatment of contingent liabilities is based on management’s view of the expected outcome of
the contingencies after consulting legal counsel for litigation cases and internal and external experts to the Group
for matters in the ordinary course of the business.
6.2 Key sources of estimation uncertainty
The following are key assumptions concerning the future and other key sources of estimation uncertainty at the end of
the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year:
(a) Depreciation and amortisation of property, plant and equipment
FINANCIAL STATEMENTS
The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’ useful lives.
The estimated useful lives applied by the Group as disclosed in Note 4.3 to the financial statements reflect the
Directors’ estimate of the period that the Group expects to derive future economic benefits from the use of the
Group’s property, plant and equipment. These common life expectancies are applied in the various business
segments of the Group. Changes in the expected level of usage and technological developments could impact
the economic useful lives and the residual values of these assets; therefore future depreciation and amortisation
charges could be revised.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010
147