Sample Disclosure – Accounting Policy On Plantation Development Expenditure (28 April 2009)

Plantation Development Expenditure

Plantation development expenditure comprises assets held for plantation development activities. These assets include land and buildings used for the purpose of plantation development, infrastructure costs such as roads and bridges attached on the plantation estates, cost of planting and development of crops.

This is stated at cost less accumulated depreciation and impairment losses, if any. Freehold land is stated at cost and is not depreciated.

Depreciation is calculated on the straight-line method to write off the cost over their estimated useful lives. The principal annual rates of depreciation are:

Freehold buildings                               2%

Leasehold buildings                             over the lease period

Bridges and roads                                5%

Mature plantations                               25 years

Cost of preparation of agriculture land, planting, replanting and upkeep of crops, together with other incidental costs are capitalised as immature plantations and transferred to mature plantations account when the trees have matured and meet the criteria for commercial production.

Mature plantations are amortised over the estimated productive life of the trees estimated to be 25 years. The period of the plantations’ yield was determined by vegetative growth calculated and estimated by the management.

Replanting expenditure is expensed to the income statement immediately in the year in which the expenditure is incurred.

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3 Responses to “Sample Disclosure – Accounting Policy On Plantation Development Expenditure (28 April 2009)”

  • […] Posted by learnaccounting on April 28, 2009 If you need sample disclosure of accounting policy on plantation development expenditure please refer to:Plantation Development Expenditure […]

  • hashanah on August 25, 2010

    is it the same with winery? what about the barrels used for maturing wine? how do you value the maturing wine kept in barrels? thank you

  • admin on August 25, 2010

    No winery in my country and therefore I’m not sure of this. I guess it is similar. You’d better checked the accounting policy of those companies engaged in winery.

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