FGV Annual Report 2012

30 Felda Global Ventures Holdings Berhad 3 SIGNIFICANT ACCOUNTING POLICIES (continued) (k) Intangible assets (continued) The nature of the intangible assets are as follows: (i) Brand is related to a sugar brand ‘Prai’acquired as part of the acquisition of the sugar business in 2010. (ii) Completed technology is related to a license for a subsidiary to use certain technologies involved with producing oleic tallow. (iii) Lease agreement is related to a lease agreement for a subsidiary to lease several assets to a customer, acquired as part of business combinations. Twin Rivers Technologies Holdings, Inc. (“TRTH”), is the lessor of a portion of its facility to a tenant under a non-cancellable operating lease. This property includes natural oil tanks and an oil pipeline system. (iv) Customer relationships are related to contracts for a subsidiary to sell its product to several customers. (v) Trade name is related to the trade name ‘Twin Rivers Technologies’acquired as part of the acquisition of the fatty acids business operation in USA. (vi) Software relates to a treasury system. (vii) Intangible assets under development relates to an estate accounting system under development and land use rights for oil palm plantation in Kalimantan, Indonesia, that is still subject to other relevant approvals. Gains and losses on disposals are determined by comparing proceeds with the carrying amount of the assets and are included in profit or loss. (l) Biological assets Oil palm and rubber plantations Planting development costs comprises new planting development costs which are accounted for under the capital maintenance method. Under the capital maintenance method, development costs incurred (for example land clearing and upkeep of trees) up to the maturity period of 0 to 3 years for oil palm and 0 to 7 years for rubber are capitalised and not amortised, and are shown as a non-current asset net of accumulated impairment losses. Capitalised development costs will be subject to accelerated depreciation if the existing planted area has been earmarked by the Directors for replanting with a different crop, after writing down the carrying amount to its recoverable amount. Replanting expenses are charged to profit or loss in the year in which they are incurred. When the planted area is replanted with a different crop, the remaining previously capitalised development costs is expensed off in the profit or loss and the new planting development costs in respect of the new crop is capitalised. Nursery Nursery costs comprise costs of oil palm and rubber seedlings and the associated development costs incurred (for example fertilising and weeding) in preparing the nursery. Nursery costs relating to new planting are transferred to oil palm and rubber plantations upon reaching a certain level of maturity, which is between 10 to 12 months for oil palm and 5 to 6 months for rubber, while other types are charged to profit or loss. Sugar cane Sugar cane comprises new planting development costs which are accounted for under the capital maintenance method. Under the capital maintenance method, new planting development costs incurred (e.g. land clearing, planting and upkeep of trees) up to their maturity is capitalised and not amortised and are shown as historical costs less accumulated impairment losses. However, the capitalised costs will be amortised to statement of comprehensive income on a straight-line basis over the remaining lease period if the sugar cane are planted on leasehold land and the remaining lease period is shorter than the economic useful life of the sugar cane. Where an indication of impairment exists, the carrying amount of the biological asset is assessed and written down immediately to its recoverable amount. See significant accounting policies Note 3(n) on impairment of non-financial assets. Notes to the Financial Statements for the financial year ended 31 December 2012