147 / 284
FINANCIAL STATEMENTS
Axiata Group Berhad | Annual Report 2016
145
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Contingent liabilities and contingent assets (continued)
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”.
(q) Share capital
(i) Classification
Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity. Other shares are classified
as equity and/or liability according to the economic substance of the particular instrument.
(ii) Share issue expenses
Incremental costs directly attributable to the issuance of new shares or options are deducted against share premium account.
(iii) Dividends to shareholders of the Company
Liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
Group, on or before the end of the reporting period but not distributed at the end of the reporting period.
Distributions to holders of an equity instrument is recognised directly in equity.
(r) Leases
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to use an asset for
an agreed period of time.
Accounting by lessee
(i) Finance leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the
present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-
term and long-term payables.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of interest on the remaining
balance of the liability. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The PPE acquired under finance leases is depreciated over the shorter
of the useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of
the lease term.