2. Significant accounting policies (CONT’D.)
2.5 Summary of significant accounting policies (cont’d.)
(c) Investment in joint operation
A joint operation is a joint arrangement whereby the parties that have the joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.
The Group as a joint operator recognises in relation to its interest in a joint operation:
- its assets, including its share of any assets held jointly;
- its liabilities, including its share of any liabilities incurred jointly;
- its share of the revenue from the sale of the output by the joint operation; and
- its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint
operation in accordance with the FRS applicable to the particular assets, liabilities, revenues and
expenses.
Profits and losses resulting from transactions between the Group and its joint operation are recognised
in the Group’s financial statements only to the extent of unrelated investors’ interests in the joint
operation.
(d) Property, plant and equipment and depreciation
All property, plant and equipment are initially recorded at cost. Subsequent costs are included in the
asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Group and the Company and
the cost of the itemcan bemeasured reliably. The carrying amount of the replacedpart is derecognised.
All other repairs and maintenance are charged to profit or loss during the financial period in which
they are incurred.
Freehold land is not amortised. Capital work-in-progress are also not depreciated as these assets are
not available for use. Leasehold land classified as finance lease is amortised over the period of the
leases ranging from 60 to 999 years (2014: 60 to 999 years). All other property, plant and equipment
are stated at historical cost less accumulated depreciation and impairment losses. Depreciation is
calculated on a straight-line basis to write off the cost of the assets to their residual values, over the
term of their estimated useful lives as follows:
Buildings
5 - 30 years
Plant and machinery
5 - 30 years
Furniture and equipment
2 - 15 years
Motor vehicles
3 - 7 years
The carrying values of plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying values may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each reporting date to ensure
that the amount, method and period of depreciation are consistent with previous estimates and the
expected pattern of consumption of the future economic benefits embodied in the items of property,
plant and equipment.
n otes to th e f i nan c i a l statements
Bo ustead plantati o ns Berhad
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