FGV Annual Report 2017

ANNUAL INTEGRATED REPORT 2017 FINANCIAL STATEMENTS 155 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 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 Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair values as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. If such an indication exists, an asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. See significant accounting policies Note 3(o) on impairment of non-financial assets. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each statement of financial position date. Intangible assets with indefinite useful lives and intangible assets under development are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable. Intangible assets are amortised using the straight line basis over their estimated useful lives as follows: Brand 20-26 years Licenses 9-18 years Lease agreement 18 years Customer relationships 9 years Software 3 - 5 years Intellectual property rights 10 years Land use rights 35 years Amortisation on intangible assets under development commences when the assets are ready for their intended use. The nature of the intangible assets are as follows: (i) Brand relates to sugar brand ‘Prai’ and consumer brands ‘Saji’, ‘Seri Pelangi’, ‘SunFlower’, ‘SunBear’, and ‘Yangambi’ acquired as part of the acquisition of the related business. (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.