95 / 168
Datasonic Group Berhad
(Company No. 809759-X)
93
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.14 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and
short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value with original maturity periods of
three months or less. For the purpose of the statement of cash flows, cash and cash equivalents
are presented net of bank overdrafts.
4.15 PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as
a result of past events, when it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and when a reliable estimate of the amount
can be made. Provisions are reviewed at the end of each reporting year and adjusted to
reflect the current best estimate. Where the effect of the time value of money is material, the
provision is the present value of the estimated expenditure required to settle the obligation.
The unwinding of the discount is recognised as interest expense in profit or loss.
4.16 BORROWING COSTS
Borrowing costs that directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of those assets, until such time as the assets
are ready for their intended use or sale. The capitalisation of borrowing costs is suspended
during extended periods in which active development is interrupted.
All other borrowing costs are recognised in profit or loss as expenses in the period in which they
incurred.
Investment income earned on the temporary investment of specific borrowing pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
4.17 INCOME TAXES
Income tax for the financial year comprises current tax and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for
the financial year and is measured using the tax rates that have been enacted or substantively
enacted at the end of the financial year.
Deferred tax liabilities are recognised for all taxable temporary differences other than those
that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the business combination costs or from
the initial recognition of an asset or liability in a transaction which is not a business combination
and at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses
and unused tax credits to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences, unused tax losses and unused tax credits
can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each
financial year and reduced to the extent that it is no longer probable that sufficient future
taxable profits will be available to allow all or part of the deferred tax assets to be utilised.