60
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
(cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Income Taxes (Cont’d)
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from
goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities over the business combination costs or from the initial recognition of an asset or
liability in a transaction which is not a business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax
credits to the extent that it is probable that future taxable profits will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of
deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax
assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively
enacted at the end of the reporting period.
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 income taxes relate to the same taxation authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred
tax items are recognised in correlation to the underlying transactions either in other comprehensive income
or directly in equity and deferred tax arising from a business combination is included in the resulting goodwill
or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities over the business combination costs.
Government Grants
Grants from the government are recognised initially as deferred income at their fair value where there is a
reasonable assurance that the grant will be received and the Group will comply with all attached conditions.
Grants that compensate the Group for expenses incurred are recognised in profit or loss over the periods
necessary to match the grants with the related costs which they are intended to compensate on a systematic
basis.
Grants that compensate the Group for the cost of an asset are recognised in profit or loss over the expected
useful life of the relevant asset on a systematic basis.
Borrowing Costs
Borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use
or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development
is interrupted.
All other borrowing costs are recognised in profit or loss as expenses in the period in which they incurred.
