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KUMPULAN FIMA BERHAD
(11817-V) |
Annual Report
2016
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Significant Accounting Estimate and Judgement (Cont’d)
Key Sources of Estimation Uncertainty (Cont’d)
(i) Classification between investment properties and property, plant and equipment (Cont’d)
The Group has sub-let portion of a building but has decided to classify the entire building as
property, plant and equipment as this portion cannot be sold separately and significant portion of
the building is held for use in the production or supply of goods or services or for administrative
purposes.
(ii) Income Tax
The Group and the Company are subject to income taxes in Malaysia and other countries.
Significant judgement is required in determining the allowances and deductibility of certain
expenses during the estimation of the provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination is uncertain during the ordinary course of
business. The Group and the Company recognise liabilities for anticipated tax matters based on
estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the income
tax and deferred tax provisions in the period in which the determination is made. The Group’s and
the Company’s tax expense for the current financial year is RM31,671,000 (2015: RM38,285,000)
and RM820,000 (2015: RM1,336,000) respectively, as disclosed in Note 10.
(iii) Deferred Tax Assets
Deferred tax assets are recognised for all deductible temporary differences to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences can
be utilised. Significant management judgement is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and level of future taxable profits
together with future tax planning strategies. The Group’s deferred tax assets as at 31 March 2016
is RM8,394,000 (2015: RM5,445,000) as disclosed in Note 30.
(iv) Useful lives and depreciation of property, plant and equipment
Management uses key source of estimation and critical judgement in the process of applying the
Group’s accounting policies for depreciation in respect of plant and machinery.
The cost of plant and machinery is depreciated on a straight-line basis over the assets’ useful
lives. Management estimates that the useful lives of the plant and machinery to be within 3 to 25
years. These are common life expectancies applied in the industry.
Changes in the expected level of usage and technological developments could impact the economic
useful lives and the residual values of these assets, therefore future depreciation charges could be
revised.