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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Revenue Recognition
(i)
Services
Revenue is recognised upon the rendering of services and when the outcome of the transaction can be estimated
reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the
extent of the expenses incurred that are recoverable.
(ii) Sale of goods
Revenue is recognised upon delivery of goods and customers’ acceptance and where applicable, net of goods
and services tax, returns, cash and trade discounts.
(iii) Contracts
Revenue relating to contracts are accounted for under the percentage-of- completion method.
(iv) Management fee
Management fee is recognised on an accrual basis.
(v) Interest income
Interest income is recognised on an accrual basis using the effect interest method.
(vi) Dividend income
Dividend income from investment is recognised when the right to receive dividend payment is established.
Income Taxes
(i)
Current Tax
Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation
authorities.
Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the
end of the reporting period and are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss (either in other comprehensive income or directly in equity).
(ii) Deferred Tax
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 reporting period 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.
Notes To The Financial Statements
(cont’d)