notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Biological assets
Biological assets comprise of expenditure incurred on land clearing, planting, fertilising and other associated cost incurred to upkeep of the crops to maturity.
Biological assets are measured at fair value less cost to sells, except on initial recognition for which market determined prices or values are not available and
for which alternative estimates of fair value are determined to be clearly unreliable. In such case, the biological assets are stated at cost less accumulated
depreciation and accumulated impairment loss if any. See accounting policy 2.15 on impairment of non-financial assets.
As each reporting date, the Group considers the nature of plantation activities being growing and managing oil palm plantations for the sale of oil palm. The
biological assets have been stated at cost less accumulated depreciation and accumulated impairment if any, as there has been little biological transformation
since the initial cost was incurred. There is currently no active market of the biological asset nor reliable alternative estimates of fair value available. The oil
palm trees are considered to be matured by 36 months after the initial field planting.
2.11 Investment properties
Investment properties are properties held to earn rental income or for capital appreciation or both rather than for use in the production or supply of goods and
services or for administrative purposes, or sale in the ordinary course of business.
(a)
Measurement basis
Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
The cost of investment properties includes expenditure that is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits associated with the asset will flow to
the Group and the cost of the asset can be measured reliably. All other repair and maintenance costs are charged to the profit or loss during the financial
year in which they are incurred.
At each reporting date, the Group assesses whether there is any indication of impairment. Where an indication of impairment exists, the carrying value
of the investment property is assessed and written down immediately to its recoverable amount. See accounting policy 2.15 on impairment of non-
financial assets.
Investment properties are derecognised upon disposal or when they are permanently withdrawn from use and no future economic benefits are expected
from their disposal. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.
Transfers are made to or from investment property only when there is a change in use. Transfers from investment property to owner-occupied property
are made at the carrying amount as at the date of change in use. For a transfer from owner-occupied property to investment property, the property is
accounted for in accordance with the accounting policy for property, plant and equipment as set out in Note 2.7 up to the date of change in use.
(b)
Depreciation
Freehold land is not depreciated. Freehold buildings are depreciated over their estimated useful lives of 50 years.
Depreciation is calculated to write off the depreciable amount of other investment properties on a straight line basis over their estimated useful lives.
Depreciation amount is determined after deducting the residual value from the cost of the investment properties.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at the end of each financial year.
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Wah Seong Corporation Berhad • Annual Report 2014
