Sample Disclosure – Accounting Policy Of Inventories, Oil Palm Sector (20 November 2009)


Inventories of the Group and of Company comprise the following:-

  • Harvested Oil Palm Fruits
  • Work-in-progress and Finished Palm Oil Products
  • Oil Palm Seedlings
  • Stores and Consumable Supplies

The above inventories are stated at the lower of cost (determined using first-in-first-out basis) and net realisable value. Cost of harvested oil palm seeds, oil palm seedlings and stores and consumable supplies comprise costs incurred in bringing the these inventories to their present location and condition. The cost of work-inprogress and finished palm oil products includes materials, labour and an appropriate proportion of manufacturing overhead.

Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution as relevant to each type of inventories.

The carrying value of any obsolete inventories is written off as an expense in income statement.

Allowance for decrease in value is made for obsolescence and deterioration for each specific type of inventories accordingly should these inventories are carried within the Group and the Company longer than their normal operating cycles.