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GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.13 Income taxes (continued)
(b) Deferred tax (continued)
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 on either:
(i) the same taxable entity; or
(ii) different taxable entities which intend either to settle current tax liabilities and assets on
a net basis, or to realise the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or assets are expected to be
settled or recovered.
Deferred tax would be recognised as income or expense and included in the profit or loss for
the period unless the tax relates to items that are credited or charged, in the same or a different
period, directly to equity, in which case the deferred tax would be charged or credited directly
to equity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on the announcement of tax
rates and tax laws by the Government in the annual budgets which have the substantive effect
of actual enactment by the end of each reporting period.
4.14 Provisions
Provisions are recognised when there is a present obligation, legal or constructive, as a result of a
past event, when it is probable that an outflow of resources embodying economic benefits would
be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
If the effect of the time value of money is material, the amount of a provision would be discounted to
its present value at a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of resources embodying economic benefits would
be required to settle the obligation, the provision would be reversed.
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.