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FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT
2015
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Critical Accounting Estimates And Judgements (Cont’d)
(ix) Write-down of Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews
require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of
inventories.
Assets Held For Sale
Assets that are expected to be recovered primarily through sale rather than through continuing use are classified as
held for sale. Upon classification as held for sale, assets or components of a disposal group are not depreciated and are
measured at the lower of their carrying amount and fair value less cost to sell. Any differences are recognised in profit
or loss.
Operating Segments
Operating segment is a component of the Group that engages in business activities from which it 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 operating results are reviewed regularly by the chief operating decision maker
to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.
Revenue Recognition
(i)
Services
Revenue is recognised upon the rendering of services and when the outcome of the transaction can be estimated
reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the
extent of the expenses incurred that are recoverable.
(ii) Sale of goods
Revenue is recognised upon delivery of goods and customers’ acceptance and where applicable, net of goods
and services tax, returns, cash and trade discounts.
(iii) Contracts
Revenue relating to contracts are accounted for under the percentage-of-completion method.
(iv) Management fee
Management fee is recognised on an accrual basis.
(v) Interest income
Interest income is recognised on an accrual basis using the effect interest method.
(vi) Dividend income
Dividend income from investment is recognised when the right to receive dividend payment is established.
Income Taxes
Income tax for the reporting period comprises current tax and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and
is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.
NOTES TO THE FINANCIAL STATEMENTS
(cont’d)