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annual report | 2012 Gunung Capital Berhad (330171-P) 62 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.
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) (t) Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. (i) Sale of goods Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer. (ii) Rendering of services Revenue from render of services is recognised upon completion of service rendered. (iii) Rental income Rental income is accounted for on a straight-line basis over the term of the lease. The aggregate of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis. (iv) Interest income Interest income is recognised on accrual basis. (v) Dividend income Dividend income is recognised when the right to receive payment is established. (u) Discontinued Operations A component of the Group is classified as a “discontinued operation” when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single coordinated major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Upon classification as held for sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss. (v) Operating Segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenue and expenses that relate to transactions with any of the Group’s other components. An operating segment’s results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. (w) Government Grants Government grants are recognised when there is reasonable assurance that the Group will comply with the conditions attaching to them and the grants will be received. Government grants related to assets are recognised as deferred revenue that is recognised in profit or loss on a systematic basic over the useful lives of the assets. Government grants related to income are presented as a credit in the profit or loss separately. Gunung Capital Berhad (330171-P) 63 annual report | 2012
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(Source: CEO of Gunung Capital Bhd,
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