85 / 178
83
GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.12 Borrowing costs
Borrowing costs that are directly attributable to the acquisition or production of a qualified asset
is capitalised as part of the cost of the asset until when substantially all the activities necessary to
prepare the asset for its intended use or sale are complete, after which such expense is charged to
profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended
periods in which active development is interrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on
the borrowing during the period less any investment income on the temporary investment of the
borrowing.
All other borrowing cost is recognised in profit or loss in the period in which they are incurred.
4.13 Income taxes
Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include
other taxes, such as withholding taxes, which are payable by a foreign subsidiary, a joint venture or a
joint operation on distributions to the Group and Company, and real property gains taxed payable
on disposal of properties, if any.
Taxes in the profit or loss and other comprehensive income comprise current tax and deferred tax.
(a) Current tax
Current tax expenses are determined according to the tax laws of each jurisdiction in which the
Group operates and include all taxes based upon the taxable profits (including withholding taxes
payable by foreign subsidiaries on distribution of retained earnings to companies in the Group), and
real property gains taxes payable on disposal of properties, if any.
(b) Deferred tax
Deferred tax is recognised in full using the liability method on temporary differences arising between
the carrying amount of an asset or liability in the statement of financial position and its tax base.
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or
the initial recognition of an asset or liability in a transaction which is not a business combination and
at the time of transaction, affects neither accounting profit nor taxable profit.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits would
be available against which the deductible temporary differences, unused tax losses and unused tax
credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each
reporting period. If it is no longer probable that sufficient taxable profit would be available to allow
the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred
tax asset would be reduced accordingly. When it becomes probable that sufficient taxable profits
would be available, such reductions would be reversed to the extent of the taxable profits.