Page 118 - S P Setia Annual Report 2013
P. 118

116 | Financial Statements S P SETIA BERHAD GROUP Annual Report 2013



1. SiGniFicant accOUntinG POlicieS (cOnt’D)

(x) Provisions
Provisions are recognised when the Group and Company have a present obligation (legal or constructive) as a result of a past event,
it is probable that an outfow of economic resources will be required to settle the obligation and the amount of the obligation can be
estimated reliably.
Provisions are reviewed at each reporting date and adjusted to refect the current best estimate. If it is no longer probable that an
outfow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money
is material, provisions are discounted using a current pre-tax rate that refects, where appropriate, the risks specifc to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognised as fnance cost.

(y) taxation

The income tax expense in proft or loss represents the aggregate amount of current tax and deferred tax. Current tax is the expected
income tax payable or receivable on the taxable income or loss for the year, estimated using the tax rates enacted or substantially
enacted by the end of the reporting period.
On the statement of fnancial position, a deferred tax liability is recognised for taxable temporary differences while a deferred tax asset
is recognised for deductible temporary differences and unutilised tax losses only to the extent that it is probable that taxable proft will
be available in future against which the deductible temporary differences and tax losses can be utilised.
No deferred tax is recognised for temporary differences arising from the initial recognition of:

(i) goodwill, or
(ii) an asset or liability which is not a business combination and at the time of the transaction, affects neither accounting proft nor
taxable proft.

Deferred tax assets and liabilities are measured based on tax consequences that would follow from the manner in which the asset or
liability is expected to be recovered or settled, and based on tax rates enacted or substantively enacted by the reporting date that are
expected to apply to the period when the asset is realised or when the liability is settled.
Current tax and deferred tax are charged or credited directly to Other Comprehensive Income if the tax relates to items that are credited
or charged, whether in the same or a different period, directly to Other Comprehensive Income.
(z) cash and cash equivalents

Cash and cash equivalents consist of cash and bank balances, deposits with licensed banks, fxed income trust funds and other licensed
fnancial institutions, which are short term, highly liquid investments that are readily convertible to known amounts of cash and which
are subject to insignifcant risk of changes in value.
For the purposes of the statements of cash fows, cash and cash equivalents are presented net of bank overdrafts and exclude fxed
deposits, sinking fund, debt service reserve, escrow and revenue accounts pledged to secure banking facilities.
(aa) Operating segments
Segment reporting in the fnancial statements is presented on the same basis as it is used by management internally for evaluating
operating segment performance and in deciding how to allocate resources to each operating segment. Operating segments are
distinguishable components of the Group that engage in business activities from which they may earn revenues and incur expenses,
including revenues 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 decide how to allocate resources to the segment and assess its
performance, and for which discrete fnancial information is available.

Segment revenues, expenses, assets and liabilities are those amounts resulting from operating activities of a segment that are directly
attributable to the segment and a relevant portion that can be allocated on a reasonable basis to the segment.
Segment revenues, expenses, assets and liabilities are determined before intra-group balances and intra-group transactions are
eliminated as part of the consolidation process, except to the extent that such intra-group balances and transactions are between
group entities within a single segment.
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