Bursa Malaysia • Annual Report 2013
117
Financial Reports
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(p) Income taxes (cont’d.)
(ii) Deferred tax (cont’d.)
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 financial year end.
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 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.
(q) Foreign currency
(i) Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in
which the entity operates (the functional currency). The consolidated financial statements are presented in RM, which is also the Company’s
functional currency.
(ii) Foreign currency transactions
In preparing the financial statements of the individual entities, transactions in foreign currencies are measured in the respective functional
currencies at the exchange rates approximating those ruling at the transaction dates. At each financial year end, monetary assets and
liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the financial year end. Non-monetary items
denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the
date when the fair value was determined.
Exchange differences arising from the settlement of monetary items, or on translating monetary items at the financial year end are recognised
in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations,
which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The
foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are not included in profit or loss for the period until
their impairment and disposal.
Notes to the Financial Statements
31 December 2013