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notes to the financial statements (cont’d)
for the financial year ended 30 June 2014
ANNUAL REPORT 2014
65
2. Summary of significant accounting policies (CONT’D)
2.10 Intangible assets (cont’d)
(b) Other intangible assets (cont’d)
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually,
or more frequently if the events and circumstances indicate that the carrying value may be impaired
either individually or at the cash-generating unit level. Such intangible assets are not amortised. The
useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether
the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to
finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when
the asset is derecognised.
(i)
Computer software
The useful life of computer software is amortised on a straight-line basis over the estimated
economic useful life of ten years.
(ii) Prepaid timber rights
Rights in timber licences are stated at cost and are amortised on a straight-line basis over the
remaining tenure of the respective licence periods. The policy for the recognition and measurement
of impairment losses is in accordance with Note 2.13.
2.11 Biological assets
(i)
Oil palm plantation development expenditure
Plantation expenditure incurred on land clearing, upkeep of immature oil palms, administrative expenses
and interest incurred during the pre-cropping period are capitalised under biological assets and are not
amortised. Upon maturity, all subsequent maintenance expenditure is charged to profit or loss. Replanting
expenditure incurred on similar crops on formerly developed areas is chargeable to the profit or loss in
the financial year in which it is incurred.
(ii) Reforestation (tree planting) expenditure
Reforestation (tree planting) expenditure incurred on land clearing, administrative expenses and interest
incurred during the pre-harvesting period are capitalised under biological assets and is not amortised.
Upon harvesting, all subsequent maintenance expenditure is charged to profit or loss. Replanting
expenditure incurred on similar trees on formerly developed areas is chargeable to profit or loss in the
financial year in which it is incurred.
2.12 Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at
cost less accumulated amortisation and accumulated impairment losses. The land use rights are amortised
over their lease terms.