Section 8 UEM Edgenta Berhad FINANCIAL STATEMENTS 288 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2. ACCOUNTING POLICIES (CONTD.) 2.4 Summary of material accounting policies (contd.) (m) Taxes (contd.) (ii) Deferred tax (contd.) The Group has adopted International Tax Reform - Pillar Two Model rules upon its release on 2 June 2023. The amendments provide a temporary mandatory relief from deferred tax accounting for the top-up tax which is effective immediately and new disclosures of Pillar Two top-up taxes. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred. The application of the pronouncement is further discussed in Note 2.2. (iii) Sales and service tax Indirect taxes include Sales Tax, Service Tax and Goods and Services Tax (also known as Value Added Tax). The amount of indirect taxes payable to taxation authority is included as part of payables in the statements of financial position. Indirect taxes incurred on the purchase of assets or services which cannot be recovered from the respective tax authorities are recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. The difference between output and input Goods and Services Tax, being the amount payable to or receivable from the respective taxation authorities at the reporting date, is included in other payables or other receivables respectively in the statements of financial position. (n) Government grants Government grants are recognised when there is reasonable assurance that the grant will be received, and all attaching conditions will be complied with. Government grant related to income Government grants are recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income are deducted from related expenses. (o) Provisions Provisions 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. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
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