Select Harvests Limited – Annual report 30 June 2015
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (extract 1)
(a) Basis of preparation (extract)
New and amended standards adopted by the group
The Company has elected to early adopt the amendments made to AASB 116 Property, Plant and Equipment and AASB 141 Agriculture in relation to bearer plants. The resulting changes to the accounting policies and retrospective adjustments made to the financial statements are explained in Note 1(ad).
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (extract 2)
(ad) Changes in accounting policies
As explained in 1(a) above, the group has adopted the amendments made to Accounting Standards AASB 116 Property, Plant and Equipment and AASB 141 Agriculture in relation to bearer plants this year. These amendments have resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements.
(i) Bearer plants
Amendments to AASB 116 Property, Plant and Equipment and AASB 141 Agriculture distinguish bearer plants from other biological assets. Bearer plants are solely used to grow produce over their productive lives and are seen to be similar to an item of machinery. They will therefore now be accounted for under AASB 116 Property, Plant and Equipment. However, agricultural produce growing on bearer plants will remain within the scope of AASB 141 Agriculture and continue to be measured at fair value less cost to sell.
The group’s almond trees qualify as bearer plants under the new definition in AASB 141 Agriculture. As required under the standards, the change in accounting policy has been applied retrospectively to the earliest period presented in the financial statements. As a consequence, the trees were classified to property, plant and equipment effective 1 July 2013 and prior year financial statements have been restated.
The trees are now measured at amortised cost and first depreciated from maturity at year seven, to the end of their useful life which is estimated to be year 30. As permitted under the transitional rules, the fair value of the trees at 1 July 2013 was deemed to be their cost at that date.
(ii) Impact on financial statements
As a result of the changes in the entity’s accounting policies, prior year financial statements have been restated. The following tables show the adjustments recognised for each individual line item. Line items that were not affected by the change have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. As permitted under the transitional rules, the impact on the current period is not disclosed.