2. ACCOUNTING POLICIES (CONTD.) 2.5 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONTD.) (b) Key sources of estimation uncertainty (contd.) (iii) Impairment of investment in subsidiaries The Company determines whether investment in subsidiaries is impaired when there is an indication of impairment. This requires an estimation of the VIU of the investment in subsidiaries. Estimating a VIU amount requires management to make an estimate of the expected future cash flows and also to determine suitable discount and growth rates in order to calculate the present value of those cash flows. The carrying amounts of investment in subsidiaries at 31 December 2024 was RM1,708.0 million (2023: RM1,674.0 million). Further details are disclosed in Note 18. (iv) Allowance for ECLs of trade receivables and contract assets The Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments in calculating ECLs for trade receivables and contract assets. The amount and timing of future cash flows are then estimated based on historical credit loss experience for assets with similar credit risk characteristics and adjusted with forward-looking information such as forecast economic conditions. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The information about the ECLs on the Group’s trade receivables and contract assets is disclosed in Note 22 and Note 23 respectively. (v) Income taxes Significant estimation is involved in determining the 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 recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. (vi) Deferred tax assets Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The deferred tax assets amounting to RM19.6 million (2023: RM23.1 million) are mainly related to subsidiaries of which management is confident that it would be probable for the related subsidiaries to generate future taxable profits. If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increased by RM79.0 million (2023: RM71.9 million). Further details are disclosed in Note 24. Notes to the Financial Statements For the year ended 31 December 2024 UEM EDGENTA BERHAD 302 Integrated Annual Report 2024
RkJQdWJsaXNoZXIy NDgzMzc=