Annual report 2014
85
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.14 Provisions (continued)
Provisions for restructuring are recognised when the Group has approved a detailed formal
restructuring plan, and the restructuring either has commenced or has been announced publicly.
Provisions are not recognised for future operating losses. If the Group has a contract that is onerous,
the present obligation under the contract shall be recognised and measured as a provision.
4.15 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events whose existence would be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the
control of the Group or a present obligation that is not recognised because it is not probable that
an outflow of resources would be required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be recognised because it cannot be
measured reliably. The Group does not recognise a contingent liability but discloses its existence in
the financial statements.
A contingent asset is a possible asset that arises from past events whose existence would be confirmed
by the occurrence or non-occurrence of one or more uncertain future events beyond the control of
the Group. The Group does not recognise contingent assets but disclose its existence where inflows of
economic benefits are probable, but not virtually certain.
In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities
assumed are measured initially at their fair value at the acquisition date.
4.16 Employee benefits
(a) Short term employee benefits
Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and
non-monetary benefits are measured on an undiscounted basis and are expensed employees
have rendered their services to the Group.
Short term accumulating compensated absences such as paid annual leave are recognised
as an expense when employees render services that increase their entitlement to future
compensated absences. Short term non-accumulating compensated absences such as sick
leave are recognisedwhen the absences occur and they lapse if the current period’s entitlement
is not used in full and do not entitle employees to a cash payment for unused entitlement on
leaving the Group.
Bonuses are recognised as an expense when there is a present, legal or constructive obligation
to make such payments, as a result of past events and when a reliable estimate can be made
of the amount of the obligation.
(b) Defined contribution plans
The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory
provident fund and foreign subsidiaries make contributions to their respective countries’ statutory
pension schemes. The contributions are recognised as a liability after deducting any contribution
already paid and as an expense in the period in which the employees render their services.
