MISC Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS MISC BERHAD | Annual Report 2017 202 2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 2.5 Significant accounting estimates and judgements (cont'd.) (b) Key sources of estimation uncertainty (cont'd.) (v) Deferred tax assets Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies. The total carrying value of recognised deferred tax assets and the unrecognised tax losses and capital allowances are as disclosed in Note 28. (vi) Fair value of financial instruments Where the fair value of financial assets and financial liabilities recorded in the statements of financial position cannot be derived from active markets, they are determined using valuation techniques, including the discounted cash flow method. Where possible, the inputs to these valuation models are taken from observable markets. However, when this is considered unfeasible, a degree of judgement is made in establishing fair values. The judgements made include having considered a host of factors including liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Further disclosure of fair value of financial instruments is provided in Note 36. 3. REVENUE Group Corporation 2017 RM'000 2016 RM'000 2017 RM'000 2016 RM'000 Charter and lightering income 6,828,318 6,972,257 967,246 989,427 Freight income 430,391 389,818 26,931 92,769 Construction contracts 1,202,153 932,089 - - Other shipping related income 51,840 87,659 40,746 25,709 Finance income on lease receivables 1,318,302 645,104 10,844 10,831 Non-shipping income 237,208 570,312 - - 10,068,212 9,597,239 1,045,767 1,118,736 Non-shipping income mainly represents revenue generated from the operation and maintenance of offshore floating assets, management of operation of ports, marine terminals and marine vessels, provision of marine support services and consulting services for marine matters.