Group Overview Operation and Financial Review Financials Other Information Sustainability and Governance Indofood Agri Resources Ltd. 74 Notes to the financial statements For the financial year ended 31 December 2025 2. Summary of material accounting policies information (cont’d) 2.7 Property, plant and equipment (cont’d) (b) Other property, plant and equipment All other property, plant and equipment are initially recognised at cost, which comprises its purchase price and any costs directly attributable in bringing the asset to its working condition and to the location where it is intended to be used. Such cost also includes initial estimation at present value of the costs of dismantling and removing items of property, plant and equipment in certain CPO refinery and fractionation plants and margarine plants of the Group located in rented sites, costs of restoring the said rented sites, as well as costs of replacing part of such property, plant and equipment when that cost is incurred, if the recognition criteria are met. Subsequent to initial recognition, property, plant and equipment are carried at cost less any subsequent accumulated depreciation and impairment losses. 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.
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