Example Notes for bearer plant.docx-updated.docx - SHIN YANG OIL PALM SDN BHD Bearer plants and biological assets Bearer plants are living plants used

Example Notes for bearer plant.docx-updated.docx - SHIN...

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SHIN YANG OIL PALM SDN BHD Bearer plants and biological assets Bearer plants are living plants used in the production or supply of agricultural produce; are expected to bear produce for more than one period; and have a remote likelihood of being sold as agricultural produce, except for incidental scrap sales. Bearer plants mainly include mature and immature oil palm plantations. Immature plantations are stated at acquisition cost which includes costs incurred for field preparation, planting, fertilizing and maintenance, capitalization of borrowing costs incurred on loans used to finance the developments of immature plantations and an allocation of other indirect costs based on planted hectares. Mature plantations are stated at acquisition cost less accumulated depreciation and impairment. Mature plantations are depreciated on a straight line basis and over its estimated useful life of 25 years, upon commencement of commercial production. In general, oil palms are considered mature 36 months after field planting. The carrying values of bearer plants are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The residual values, useful life 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. A bearer plant 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 bearer plant is included in the income statement in the year the bearer plant is derecognized. Produce that grows on mature plantations are measured at fair value less estimated point-of sale costs. Point-of-sale costs include all costs that would be necessary to sell the produce. TSH RESOURCES BERHAD Amendments to MFRS 116 Property, Plant and Equipment and MFRS 141 Agriculture: Bearer Plants introduce a new category of biological assets i.e. the bearer plants. A bearer plant is a living plant that is used in the production and supply of agricultural produce, is expected to bear produce for more than one period, and has remote likelihood of being sold as agricultural produce, except for incidental scrap sales. Bearer plants are accounted for under the amendments to MFRS 116 as an item of property, plant and equipment. Prior to the change in accounting policy, the Group adopted the capital maintenance model on its bearer plants (i.e. oil palm trees) where all new planting expenditure (also termed as plantation development expenditure) incurred from the stage of land clearing up to the stage of maturity was capitalized and not depreciated. Replanting expenditure was charged to profit or loss in the financial year in which the expenditure was incurred. Upon adoption of the amendments to MFRS 116 and MFRS 141, bearer plants
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  • Spring '15
  • student
  • Depreciation, Palm oil, Oil palm, biological assets Bearer, biological assets Bearer plants

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