Events 2005 - ChartNexus

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Notes to the Financial Statements 31 December 2005
5. SIGNIFICANT ACCOUNTING POLICIES (Continued)
5.11 Employee benefits (Continued)
5.11.1 Short term employee benefits (Continued)
Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as
a result of past events and when a reliable estimate can be made of the amount of the obligation.
5.11.2 Defined contribution plans
The Company and subsidiary companies incorporated in Malaysia make contributions to a statutory provident fund and
foreign subsidiary companies make contributions to their respective countries’ statutory pension schemes and recognise the
contribution payable:
(a) after deducting contributions already paid as a liability; and
(b) as an expense in the financial year in which the employees render their services.
5.12 Income tax
Income tax in the financial statements for the financial year comprises current tax expense and deferred tax.
5.12.1 Current tax expense
Current tax expenses include all domestic and foreign taxes which are based on taxable profits.
5.12.2 Deferred tax
Deferred tax, which includes deferred tax liabilities and assets, is provided for under the liability method at the current tax
rate in respect of all temporary differences between the carrying amount of an asset or liability in the balance sheet and
its tax base including unused tax losses and capital allowances.
A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences can be utilised. The carrying amount of a deferred tax asset is reviewed at each
balance sheet date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or
all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When
it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the
taxable profit.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when the deferred tax assets and the deferred tax liabilities relate to the same taxation authority.
5.13 Foreign currency transactions and translating
(a) Transactions and balances in foreign currencies
Transactions in foreign currencies are converted into Ringgit Malaysia at the rates of exchange prevailing on
transaction dates, unless hedged by forward foreign exchange contracts, in which case the rates specified in such
forward contracts are used. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
date are translated into Ringgit Malaysia at the approximate rates of exchange ruling as at the balance sheet date,
unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contracts
are used.