Notes to the Financial Statements for the Financial Year Ended 30 September 2024 Sustaining Lives, Empowering Communities Governance That Inspires Confidence Financial Insights Through Numbers Empowering Ownership PG. 185 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D) (c) Significant accounting estimates and judgements (Cont’d) (v) Depreciation of property, plant and equipment (Note 10) - the cost of property, plant and equipment are depreciated on a straight-line basis over the assets’ useful lives and lease term respectively. Management estimates the useful lives of these property, plant and equipment to be within 4 to 99 years (2023: 4 to 99 years) based on past experience with similar assets or/and common life expectancies of the industries. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets resulting in revision of future depreciation or amortisation charges. Depreciation of bearer plants is charged so as to write off the cost of mature plantations, using the straight-line method, over the estimated useful lives of 20 years (2023: 20 years) or over the lease period, whichever is shorter. (vi) Fair values of investment properties (Note 14) - the measurement of the fair values for investment properties performed by management is based on independent professional valuations with reference to: - direct comparison method, being comparison of current prices in an active market for similar properties in the same location and condition and where necessary, adjusting for location, accessibility, visibility, time, terrain, size, present market trends and other differences; - investment method, being the projected net income and other benefits that the subject property can generate over the life of the property capitalised at market derived yields to arrive at the present value of the property; and - cost method of valuation, being assumed to have a direct relationship with its cost of construction, is then adjusted to allow for cost of finance, profit and demand to reflect its profitable present market value. Management believes that the chosen valuation techniques and assumptions are appropriate in determining the fair values of the Group’s investment properties. (vii) Impairment of investment in subsidiaries Management reviews the investment in subsidiaries for impairment when there is an indication of impairment. The recoverable amounts of the investment in subsidiaries are assessed by reference to the fair value less cost to sell of the underlying assets or the value in use of the respective subsidiaries. The value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted at an appropriate discount rate. Significant estimation has been applied in determining the key assumptions used in the cash flow projections, which includes the revenue growth rates, discount rate and terminal year growth rate. Impairment losses are recognised when the carrying amount of the investment in subsidiaries exceed their recoverable amount. The details of the carrying amount of the investment in subsidiaries of the Company are disclosed in Note 15.
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