axiata group berhad | annual report 2015
148
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
4.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(b) Critical accounting estimates and assumptions (continued)
(iv) Taxation
Income taxes
The Group and the Company are subject to income tax in numerous jurisdictions. Judgement is involved in determining the group-wide
provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during
the ordinary course of business. The Group and the Company recognise liabilities for tax matters based on estimates of whether additional
taxes will be due. If the final outcome of these tax matters result in a difference in the amounts initially recognised, such differences will
impact the income tax and/or deferred tax provisions in the period in which such determination is made.
Deferred tax assets
Deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which temporary
differences can be utilised. This involves judgement regarding future financial performance of a particular entity in which the deferred tax
asset has been recognised.
(v) Contingent liabilities
Determination of the treatment of contingent liabilities is based on the Group’s view of the expected outcome of contingencies after
consulting legal counsel for litigation cases and internal and external experts of the Group for matters in the ordinary course of business.
Please refer to Note 28 and Note 35(d) to the financial statements for legal proceedings that the Group is involved in as at the end of each
reporting period.
(vi) Fair value of derivatives and other financial instruments
Certain financial instruments such as investments, derivative financial instruments and certain elements of borrowings are carried on the
statement of financial position at fair value, with changes in fair value reflected in the profit or loss.
Fair values are estimated by reference in part to published price quotations and in part by using valuation techniques. The fair value of
financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation
techniques. The Group and the Company use its judgement to select a variety of methods and make assumptions that are mainly based
on market conditions existing at the end of each financial reporting period.
(vii) Provision for dismantling, removal or restoration
Fair value estimates of provision for dismantling, removal or restoration generally involve discounted future cash flows, and periodic accretion
of such liabilities due to the passage of time is recorded as finance cost. The significant assumptions used in estimating the provision are:
timing of assets removals; cost of assets removals; expected inflation rates; and the discount rates. There can be no assurances that actual
costs and the probability of incurring obligations will not differ from these estimates.
5.
INCORPORATIONS, ACQUISITIONS, MERGERS, DISPOSALS AND DILUTIONS OF INTERESTS
(a) Incorporation, acquisitions, and dilutions of interests during the financial year
(i) Acquisition of Adknowledge Asia Pacific Pte Ltd (“AAP”)
On 3 December 2014, Axiata Digital Advertising Sdn Bhd (“ADA”), a wholly-owned subsidiary of Axiata Digital Services Sdn Bhd (“ADS”)
entered into a Subscription and Shareholders’ Agreement with Adknowledge International, Inc and AAP for the acquisition of 80.00% equity
interest in AAP for a total cash consideration of RM19.6 million (USD5.5 million). The acquisition was completed on 19 January 2015.
The acquisition above did not have any significant impact to the Group during the financial year.
