EXCEL FORCE MSC BERHAD Annual Report 2018

79 ANNUAL REPORT 2018 3. Significant Accounting Policies (cont’d) (q) Income taxes (cont’d) Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (r) Contract liabilities Contract liabilities represent the Group’s and the Company’s obligation to transfer goods or services to customers for which the Group and the Company have received the consideration or has billed to the customer. The contract liabilities of the Group and the Company comprise of amount due to customers on contracts which is the excess of billings to-date over the cumulative revenue earned and deferred revenue where the Group and the Company have billed or has collected the payment before the goods are delivered or services are provided to the customers. (s) Segments reporting Operating segments are defined as components of the Group that: (a) engage in business activities from which it could earn revenue and incur expenses (including revenue and expenses relating to transactions with other components of the Group); (b) whose operating results are regularly reviewed by the chief operating decision maker of the Group in making decisions about resources to be allocated to the segment and assessing its performance; and (c) for which discrete financial information is available. An operating segment may engage in business activities for which it has yet to earn revenue. The Group reports separately information about each operating segment that meets any of the following quantitative thresholds: (a) its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per cent or more of the combined revenue, internal and external, of all operating segments. (b) the absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in absolute amount of: (i) the combined reported profit of all operating segments that did not report a loss; and (ii) the combined reported loss of all operating segments that reported a loss. (c) its assets are ten (10) per cent or more of the combined assets of all operating segments. Notes To The Financial Statements 31 December 2018 (cont’d)