2020 UEM Edgenta Annual Report

2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.4 Summary of significant accounting policies (contd.) s. Income tax (contd.) iv. Sales and service tax (“SST”) R evenues, expenses and assets are recognised net of the amount of SST except: • when the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the SST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • for receivables and payables that are stated with the amount of SST included. The net amount of SST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position. t. Provisions P rovisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably. P rovisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. u. Employee benefits i. Short term benefits W ages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. ii. Long term incentives plan L ong term incentives are granted to eligible employees subject to meeting the pre-determined financial performance and value growth targets of the Group over a vesting period of 3 years. L iability arising from long term incentives is measured and reviewed at each reporting date, based on the management’s estimates on the achievement of the pre-determined targets, and it is recognised as an expense over the performance period of 3 years. ANNUAL REPORT 2020 215 1 2 3 4 5 6 7 8