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KUMPULAN FIMA BERHAD
(11817-V) |
Annual Report
2016
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Summary of Significant Accounting Policies (Cont’d)
(k) Income Tax (Cont’d)
(ii) Deferred tax (Cont’d)
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates and tax laws
that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in
other comprehensive income or directly in equity and deferred tax arising from a business
combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists
to set off current tax assets against current tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
(l) Provisions for Liabilities
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligations and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of economic resources will be required to settle the
obligation, the provision is reversed. If the effect of the time value of money is material, provisions
are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to
the liability. When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
(m) Employee Benefits
(i) Short Term Benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense
in the year in which the associated services are rendered by employees of the Group and of
the Company. Short term accumulating compensated absences such as paid annual leave
are recognised when services are rendered by employees that increase their entitlement to
future compensated absences, and short term non-accumulating compensated absences
such as sick leave are recognised when the absences occur.