2. Significant accounting policies (CONT’D.)
2.5 Summary of significant accounting policies (cont’d.)
(h) Cash and cash equivalents
For purposes of the statements of cash flows, cash and cash equivalents comprise cash and bank
balances, demand deposits and overdrafts which are subject to an insignificant risk of changes in
value.
(i) Research and development
The Group’s research and development is undertaken through an Associate, whereby contribution
towards such activity is recognised as an expense as and when incurred.
(j) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits associated with the
transactions will flow to the Group and the Company and the amount of revenue can be measured
reliably.
(i) Sales of plantation produce
Revenue from sales of plantation produce is recognised upon the transfer of significant risks and
rewards of ownership of the goods to the customer.
(ii) Revenue from services
Revenue from services is recognised when services are rendered.
(iii) Interest income
Interest income is recognised as it accrues at effective interest unless collection is doubtful.
(iv) Dividend income
Dividends from Subsidiaries and Associates are recognised in profit or loss when the right to
receive payment is established
Sales and other revenue earned from intra-group companies are eliminated on consolidation.
(k) Provisions
Provisions are recognised when the Group and the Company have present obligations as a result of
past events, and it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligations and a reliable estimate can bemade of the amounts of the obligations.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it
is no longer probable that an outflow of economic resources will be required to settle the obligation,
the provision is reversed. If the effect of the time value of money is material, provisions are discounted
using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognised as finance
cost.
n otes to th e f i nan c i a l statements
Bo ustead plantati o ns Berhad
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