AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
2.2.3 Foreign operations The results and financial position of all group entities ( none of which has the currency of a hyper-inflationary economy ) that have a functional currency different to the company ’ s presentation currency , are translated into the presentation
Assets and liabilities at the closing exchange rate at the reporting date , Income and expense items are translated at the average exchange rates ( unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates in which case income and expenses are translated at the dates of the transactions ), and All resulting exchange differences are recognised in other comprehensive income .
On disposal of foreign operations , the component of other comprehensive income relating to that particular foreign operation is reclassified out of other comprehensive income . Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate at the reporting date .
2.3 Property , plant and equipment Property , plant and equipment are held with a view to generate economic benefit from it for more than one period of use in the production or supply of goods or services or for administrative purposes and are not acquired for resale purposes .
All property , plant and equipment items are initially recognised at cost . Thereafter it is measured with reference to the cost of the asset less accumulated depreciation and accumulated impairments .
The cost of property , plant and equipment includes the following : purchase price including import duties , nonrefundable purchase taxes and costs directly attributable to bringing an asset to the location and condition necessary to operate as intended by management , less trade discounts and rebates . Property , plant and equipment with a cost of more than R7 000 are capitalised , while assets with a cost of less than R7 000 are written off against operating profit . Profits and losses on sale of property , plant and equipment are calculated on the basis of their carrying values and are accounted for in operating profit . With the replacement of a part of an item of property , plant and equipment , the replaced part is derecognised . The replacement part shall be recognised according to the recognition criteria as an individual asset with specific useful life and depreciation .
The carrying values of property , plant and equipment are considered for impairment when the events or changes in circumstances indicate that the carrying values are no longer recoverable from its future use or realisation of the assets .
Depreciation is calculated on a fixed percentage basis over the expected useful life at the following rates :
% Land - Silos 2,85 Buildings and improvements 2,5 Plant and equipment 7,5-33,3 Vehicles 20 Heavy vehicles * * Heavy vehicles are depreciated at 40 %, 30 %, 20 % and 10 % per annum over a four year period .
Depreciation begins when an asset is available for use , even if it is not yet brought into use . Each part of an item of property , plant and equipment with a cost which is significant in relation to the total cost of the item , is depreciated separately . Land is not depreciated as it is deemed to have an unlimited life .
72 AGRIBEL ANNUAL FINANCIAL REVIEW 2021 Agribel Holdings Limited Reg nr : 1996 / 017629 / 06