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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Contract Customers (Cont’d)
When the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract
costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which
they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an
expense immediately.
Employee Benefits
(i)
Short-term employee benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an
undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered
by employees of the Group.
(ii) Defined contribution plans
The Group’s contributions to defined contribution plans are recognised in profit or loss in the period to which
they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined
contribution plans.
(iii) Defined benefit plans
The Group’s net obligation in respect of defined benefit retirement plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in return for their service in the current and
prior periods; that benefit is discounted to determine its present value. The calculation is performed annually by
a qualified actuary using the projected unit credit with service increment method. When the calculation results in
a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the
present value of economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any
minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group
of it is realisable during the life of the plan, or on settlement of the plan liabilities.
When the benefits of a plan are improved, the portion of the increased benefit relating to the past service by
employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become
vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.
The Group recognises all actuarial gains and losses arising from defined benefit plans in other comprehensive
income and all expenses related to defined benefit plans in personnel expenses in profit or loss.
The Group recognises gains and losses on the curtailment or settlement of a defined benefit plan when the
curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value
of plan assets, change in the present value of defined benefit obligation and any related actuarial gains and losses
and past service cost that had not previously been recognised.
Notes To The Financial Statements
(cont’d)