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Masterskill Education Group Berhad / Annual Report 2012<br />
76<br />
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)<br />
2. SIGNIFICANT ACCOuNTING pOlICIES (Cont’d)<br />
(j) provisions<br />
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be<br />
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions<br />
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of<br />
the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.<br />
(k) Contingent liabilities<br />
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably,<br />
the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the<br />
probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the<br />
occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability<br />
of outflow of economic benefits is remote.<br />
(l) Revenue and other income<br />
(i) Services<br />
Revenue of the Group represents course fees, registration fees, processing fees, administration fees and other<br />
miscellaneous fees.<br />
Revenue from course fees is recognised over the period of the course in profit or loss. Registration fees, processing fees<br />
and administration fees are recognised in profit or loss upon commencement of the course.<br />
other miscellaneous fees represent physiotherapy and rehabilitation services fees, dialysis services fees, convocation fees<br />
and co-curriculum fees.<br />
(ii) Interest income<br />
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income<br />
arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which<br />
is accounted for in accordance with the accounting policy on borrowing costs.<br />
(iii) Dividend income<br />
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment<br />
is established, which in the case of quoted securities is the ex-dividend date.<br />
(m) Borrowing costs<br />
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are<br />
recognised in profit or loss using the effective interest method.<br />
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that<br />
necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of<br />
those assets.<br />
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is<br />
being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use<br />
or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary<br />
to prepare the qualifying asset for its intended use or sale are interrupted or completed.