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annual report | 2012 Gunung Capital Berhad (330171-P)
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NOTES TO THE FINANCIAL STATEMENTS (cont’d)
31 DECEMBER 2012
2 SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.4 Summary of Significant Accounting Policies (cont’d)
(r) Income Tax
Tax on the profit or loss for the financial year comprises current and deferred tax. Income tax is recognised in
the profit or loss except to the extent that it relates to items recognised outside profit or loss, either in other
comprehensive income or directly in equity.
Current tax expense is the expected tax payable on the taxable income for the financial year, using tax rates
enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous financial years.
Deferred tax is provided, using the liability method, on all material temporary differences arising between
tax bases of assets and liabilities and their carrying amounts in the financial statements.
Temporary differences are not recognised for the initial recognition of assets or liabilities that at the time of
the transaction affects neither accounting nor taxable profit. The amount of deferred tax provided is based
on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities, using
tax rates enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits
and unused tax losses, to the extent that it is probable that future taxable profits will be available against
which these assets can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting period 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 period 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 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.
(s) 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.
(ii) Defined contribution plans
As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees
Provident Fund (“EPF”). Such contributions are recognised as expense in profit or loss in the year to
which they relate.