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JAYA TIASA HOLDINGS BERHAD
Notes to the Financial Statements (cont’d)
for the financial year ended 30 June 2015
2.
Summary of significant accounting policies (cont’d)
2.10 Intangible assets (cont’d)
(b) Other intangible assets (cont’d)
(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.
2.13 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when an annual impairment assessment for an asset is required, the Group makes
an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units (“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a
CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those
units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of
units on a pro-rata basis.
