FGV Annual Report 2015

206 Notes to the Financial Statements For The Financial Year Ended 31 December 2015 Felda Global Ventures Holdings Berhad Annual Integrated Report 2015 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The principal accounting policies applied in the preparation of financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (continued) (l) Intangible assets (continued) (ii) Licenses is related to a license for subsidiaries to use certain technologies. (iii) Lease agreement is related to a lease agreement for a subsidiary to lease several assets to a customer, acquired as part of a business combination. 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) Software relates to information technology (“IT”) used within the Group (vi) Intellectual property rights relates to patents for the commercialisation of high quality graphene. (vii) Land use rights relates to oil palm plantations in Indonesia. (viii) Intangible assets under development relates to IT system under development. (m) Biological assets Oil palm and rubber plantation estates Biological assets are new development costs which are accounted for under the capital maintenance method. Under the capital maintenance method, planting development costs incurred (for example land clearing and upkeep of trees) up to the maturity period of zero (0) to three (3) years for oil palm and zero (0) to seven (7) years for rubber are capitalised and not amortised, and are shown as a non-current asset net of accumulated impairment losses. Biological assets 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 carrying value of the existing biological assets is expensed off in profit or loss and the planting development costs in respect of the new crop is capitalised. For land reclaimed by FELDA in accordance with the provisions of the LLA, the carrying value of the biological assets on the said land is derecognised in profit or loss based on areas reclaimed by FELDA, recognised when vacant possession of the land is transferred. Additional land acquired from FELDA under the LLA is recorded at the lower of the present value of minimum lease payments payable or its fair value.