FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 161 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 30 BIOLOGICAL ASSETS (CONTINUED) Oil Palm Oil palm represents the fresh fruit bunches (“FFB”) of up to 15 days prior to harvest for use in the Group’s palm product operations. During the financial year ended 31 December 2023, the Group harvested approximately 3,641,187 metric tonnes (“MT”) of FFB (2022: 3,991,555 MT). The quantity of unharvested FFB of the Group as at 31 December 2023 included in the fair valuation of FFB was 121,737 MT (2022: 140,660 MT). In arriving at the fair value, the Group adopted the income approach which considers the net present value of all directly attributable cash inflows, cash outflows and imputed contributory asset charges where no actual cash flows associated with the use of assets essential to the agricultural activity. Changes to the assumed prices of the FFB and tonnage included in the valuation will have a direct effect on the reported valuation. The Groups biological assets computation is a Level 3 fair value estimation. If the selling prices of FFB or tonnage changed by 10%, the Group’s fair value of FFB would have increased or decreased by approximately RM15.31 million (2022: RM20.90 million). Dairy Cow In arriving at the fair value, the Group had adopted the discounted cash flows method in which the dairy cows were considered for its projected quantity of milk to be produced over the life of the milkers as well as the projected market price of the transformation from calves to heifers and taking into account the expected feeding cost and both the calves and milkers’ mortality rate. Changes to the projected milk quantity per dairy cow per day, the culling rate per annum of the milkers and calves and the feed cost of milkers and calves per day per dairy cow included in the valuation will have a direct effect on the reported valuation. The Group’s biological assets computation is a Level 3 fair value estimation. If the projected milk quantity per dairy cow per day changed by 5%, the Group’s fair value of dairy cows would have increased or decreased by RM69,000 (2022: RM186,000). Cash Crop As at 31 December 2023, cash crop includes pineapple, banana and corn. During the financial year, fair value changes of RM1,082,000 was recognised on its pineapple crops. In measuring the fair value of pineapples, management estimates and judgements are required which includes the following: • culling rate of pineapple plants • selling price of pineapples • selling price of pineapple suckers • grading of pineapple based on weight of pineapples harvested
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