Non-amortisation of Plantation Development Expenditure
With effect from 1 April 2008, planting expenditure incurred on newly developed land capitalised under plantation development expenditure is not amortised. Replanting expenditure of similar crops on former developed areas is chargeable to the income statement in the financial year it is incurred. In the opinion of the directors, the change in accounting policy provides reliable and more relevant information. This change in accounting policy has been accounted for retrospectively. Previously, amortisation was provided on plantation development expenditure of matured areas. The following table provides the extent of the change in accounting policy on the income statement and balance sheet had the previous policy been applied in the current year:
| Effect on income statement for the year ended 31 March 2009 | |
|
RM |
|
| Increase in cost of sales |
500,000 |
| Decrease in profit before tax |
500,000 |
| Decrease in tax expense |
125,000 |
| Decrease in profit for the year |
375,000 |
| Effect on balance sheet as at 31 March 2009 | |
|
RM |
|
| Decrease in plantation development expenditure |
500,000 |
| Decrease in deferred tax liability |
125,000 |
| Decrease in retained earnings |
375,000 |