FGV Audited Financial Statements 2020

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Investment properties (continued) Investment property is derecognised either when it has been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Gains and losses on disposals are determined by comparing net disposal proceeds with the carrying amount and are included in “other operating income” in profit or loss. At each statement of financial position date, the Group assess whether there is any indication of impairment. 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. (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: Intangible assets Estimated useful lives (years) Brand 20 to 26 Software 3 to 5 Land use rights 35 Others 18 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) Software relates to information technology (“IT”) used within the Group. (iii) Land use rights relates to oil palm plantations in Indonesia. (iv) Intangible assets under development relates to IT system under development. 40 Notes to the Financial Statements For The Financial Year Ended 31 December 2020 FGV HOLDINGS BERHAD Audited Financial Statement 2020