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KUMPULAN FIMA BERHAD

(11817-V) |

Annual Report

2016

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 Summary of Significant Accounting Policies (Cont’d)

(j) Inventories (Cont’d)

Net realisable value represents the estimated selling price in the ordinary course of business less

all estimated costs to completion and the estimated costs necessary to make the sale.

(k) Income Tax

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from

or paid to the taxation authorities. The tax rates and tax laws used to compute the amount

are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items

recognised outside profit or loss, either in other comprehensive income or directly in equity.

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting

date between the tax bases of assets and liabilities and their carrying amounts for financial

reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

-

where the deferred tax liability arises from the initial recognition of goodwill or of an

asset or liability in a transaction that is not a business combination and, at the time of

the transaction, affects neither the accounting profit nor taxable profit or loss; and

-

in respect of taxable temporary differences associated with investments in subsidiary

companies, associated companies and interests in joint ventures, where the timing of

the reversal of the temporary differences can be controlled and it is probable that the

temporary differences will not reverse in the foreseeable future.

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 taxable profit

will be available against which the deductible temporary differences, and the carry forward of

unused tax credits and unused tax losses can be utilised except:

-

where the deferred tax asset relating to the deductible temporary difference arises

from the initial recognition of an asset or liability in a transaction that is not a business

combination and, at the time of the transaction, affects neither the accounting profit nor

taxable profit or loss; and

-

in respect of deductible temporary differences associated with investments in subsidiary

companies, associated companies and interests in joint ventures, deferred tax assets

are recognised only to the extent that it is probable that the temporary differences will

reverse in the foreseeable future and taxable profit will be available against which the

temporary differences can be utilised.