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FINANCIAL REPORTS
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Bursa Malaysia •
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2015
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(q) Income taxes (cont’d.)
(ii) Deferred tax
Deferred tax is provided using the liability method on temporary differences at the financial year end between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except for the deferred tax liability that arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, unutilised tax losses and unused tax credits, to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences, unutilised tax losses and
unused tax credits can be utilised except where the deferred tax asset arises from the initial recognition of an asset or liability in a
transaction that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets are reviewed at each financial year end 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 assets to be utilised.
Unrecognised deferred tax assets are reassessed at each financial year end 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 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.
(r) 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.