INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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For the financial year ended 31 December 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.8
Biological assets (cont’d)
Oil palm trees have an average life of 25 years, normally with the first 3 to 4 years at immature stage and the remaining
years at mature stage.
Rubber trees have an average life of 25 years, normally with first 5 to 6 years at immature stage and the remaining
years at mature stage.
Sugar cane is ready for harvest in 12 months since planting and can be harvested annually for an average of 4 years.
Timber trees are ready for harvest in 8 years since planting.
2.9
Plasma receivables
Plasma receivables represent the accumulated costs to develop plasma plantations which are currently being financed
by banks and self-financed by certain subsidiaries. Upon obtaining financing from the bank, the said advances will be
offset against the corresponding funds received from rural cooperatives unit (Koperasi Unit Desa or the “KUD”). For
certain plasma plantations, the loans obtained from the bank are under the related subsidiaries’ (acting as nucleus
companies) credit facility. When the development of plasma plantation is substantially completed and ready to be
transferred or handed-over to plasma farmers, the corresponding investment credit from the bank transferred to the
plasma farmers.
Plasma receivables also include advances to plasma farmers for topping up the loan interest and instalment payments
to banks, and advances for fertilizers and other agriculture supplies. These advances shall be reimbursed by the
plasma farmers.
Plasma receivables are classified as loans and receivables under FRS 39. The accounting policy for financial instruments
is set out in Note 2.15.
2.10 Intangible assets
(a)
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to the Group’s cash-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
The cash-generating units to which goodwill has been allocated are tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined for
goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units)
to which the goodwill relates.
(b)
Other intangible assets
Intangible assets acquired separately are measured initially at cost. Following initial acquisition, intangible
assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally
generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is
reflected in profit or loss in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are amortised over the estimated useful lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by
changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
