NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024 2. Summary of material accounting policies information (cont’d) 2.7 Property, plant and equipment (cont’d) (b) Other property, plant and equipment (cont’d) Depreciation of an asset commences when the asset is available for use in the manner intended by the Group and is computed on a straight-line basis over the estimated useful lives of the assets as follows: • Buildings and improvements 10 to 25 years • Plant and machinery 4 to 20 years • Heavy equipment, transportation equipment and vessel 5 to 30 years • Furniture, fixtures and office equipment 4 to 10 years Assets under construction included in property, plant and equipment are not depreciated as these assets are not yet available for use. Assets under constructions are stated at cost, including capitalised borrowing costs and other charges directly incurred in connection with the financing of the assets under construction. Assets under construction will be reclassified to the appropriate property, plant and equipment category once the construction is completed. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The residual value, useful life and depreciation method are reviewed at each financial year end, and adjusted prospectively if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised. Repairs and maintenance costs are taken to the profit or loss when they are incurred. The cost of major renovation and restoration is included in the carrying amount of the related asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group, and is depreciated over the remaining useful life of the related asset. 2.8 Biological assets The Group’s biological assets comprise timber plantations and agricultural produce of the bearer plants, which primarily comprise of fresh fruit bunches, oil palm seeds, latex and sugar cane. The Group recognised the fair value of biological assets in accordance with SFRS(I) 1-41. Biological assets are stated at fair value less costs to sell. Gains or losses arising on initial recognition of biological assets and from the change in fair value of biological assets at each reporting date are recognised in the profit or loss for the period in which they arise. Agricultural produce The Group adopted the income approach to measure the fair value of the biological assets. For the valuation of unharvested produce of oil palm and rubber trees, the Group has applied the estimated harvest data subsequent to year end to derive the fair value of unharvested produce of oil palm and rubber trees at year end. For the valuation of unharvested produce of mother palm trees and sugar cane, the Group has applied discounted cash flow models to derive its fair value. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review Annual Report 2024 77
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