Annual Report 2016
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2. Significant accounting policies (Cont’d)
(h) Biological assets
(i) Plantation development expenditure
New planting which include land clearing, planting, field upkeep and maintenance of oil palm planting to
maturity are capitalised as plantation development expenditure. Oil palm planting are considered mature 30
months after the date of planting. Expenditures incurred after maturity of crops are charged to the profit or
loss. Estate overhead expenditure is apportioned to revenue and plantation development expenditure on the
basis of the proportion of mature and immature areas.
Net income from scout harvesting prior to maturity is offset against plantation development expenditure.
Replanting expenditure is written off during the year in which it is incurred.
(ii) Livestock
Layer farms
Pullets and layers are measured at the lower of amortised cost and net realisable value. Cost of layers includes
cost of the pullet plus all attributable costs including relevant overheads in nursing the pullet to the point of lay.
Thereafter the cost is amortised over its estimated economic life of the layers of approximately 60 weeks.
Net realisable value is defined as the aggregate income expected to be generated from total eggs to be
produced per layer and sales proceeds from the disposal of the ex-layer less related expenses expected to
be incurred to maintain the layer.
Breeder farms
Breeders and hatching eggs are measured at the lower of cost less amortisation and net realisable value.
Cost of breeders includes cost of parent stock plus all attributable cost including relevant overheads in breeding
the parent stock and is amortised over its estimated economic useful life of approximately 40 weeks. Cost of
hatching eggs includes cost of raw materials, direct labour and all other attributable cost including relevant
overheads.
Net realisable value is defined as the aggregate income expected to be generated from the sales of day-old-
chicks produced and sales proceeds from the disposal of the ex-layer less related expenses expected to be
incurred to maintain the layer.
Broiler farms
Broilers are measured at lower of cost and net realisable value. Cost of broilers includes costs of chicks plus
all attributable costs in breeding the chicks to saleable condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost
of completion and the estimated costs necessary to make the sale.
Shrimp farms
Shrimp livestock are measured at lower of cost and net realisable value. Cost of shrimp livestock includes
costs of larvae and nauplii plus all attributable costs in breeding the shrimp livestock to saleable condition. For
broodstock, cost consists of the original purchase price less any impairment losses. The costs of the broodstock
are amortised over the expected reproductive lifespan which are estimated to be approximately 6 months.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost
of completion and the estimated costs necessary to make the sale.
Notes to the Financial Statements
(Cont’d.)
