axiata group berhad | annual report 2015
140
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Current and deferred tax (continued)
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilised.
Tax benefit from investment tax incentive is recognised when the tax credit is utilised and no deferred tax asset is recognised when the tax credit
is claimed.
(p) Provisions
Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount can be made. Where
the Group and the Company expect a provision to be reimbursed (for example, under an insurance contract), the reimbursement is recognised
as a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in a settlement is determined by considering the
class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to
passage of time is recognised as finance cost.
Provision for liabilities is mainly provisions for dismantling, removal or restoration on identified sites. Provisions are reviewed at the end of the
reporting period and adjusted to PPE to reflect the current best estimation. Where the time value of money is material, the amount of a provision
is the present value of the future period expenditure expected to be required to settle the obligation.
(q) Contingent liabilities and contingent assets
The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible
obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a
present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A
contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognised because it cannot be
measured reliably.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain future events beyond the
control of the Group. The Group does not recognise a contingent asset but discloses its existence where inflows of economic benefits are
probable, but not virtually certain.
In the acquisition of subsidiaries by the Group under a business combination, the contingent liabilities assumed are measured initially at their fair
values at the acquisition date, irrespective of the extent of any NCI.
The Group recognises separately the contingent liabilities of the acquirers as part of allocating the cost of a business combination where their fair
values can be measured reliably. Where the fair values cannot be measured reliably, the resulting effect will be reflected in the goodwill arising
from the acquisitions.
Subsequent to the initial recognition, the Group measures the contingent liabilities that are recognised separately at the date of acquisition at the
higher of the amount that would be recognised in accordance with the provisions of MFRS 137 “Provisions, Contingent Liabilities and Contingent
Assets” and the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with MFRS 118 “Revenue”.
