Financial Statements Notes to the Financial Statements 1. BASIS OF PREPARATION (continued) (d) Use of estimates and judgements (continued) There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes: • Note 3 – measurement of the recoverable amounts of property, plant and equipment • Note 5 – measurement of the fair value of investment properties • Note 6 – measurement of the recoverable amounts of cash-generating units • Note 23 – measurement of liabilities on put options granted to non-controlling interests • Note 39 – measurement of fair value of assets acquired and liabilities assumed in a business combination • Note 44 – assessment on whether the risk of loss is remote, possible or probable required significant judgement given the complexities involved As at 31 December 2023, the Group’s net current liabilities is RM743,907,000. In the preparation of the financial statements on a going concern basis, the Group has considered the future operating results and the availability of unutilised banking facilities to fulfil its obligations as and when they fall due. 2. MATERIAL ACCOUNTING POLICIES Changes in Material Accounting Policies Deferred tax related to assets and liabilities arising from a single transaction The Group has adopted Amendments to MFRS 112, Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction from 1 January 2023. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and offsetting temporary differences – e.g. leases and decommissioning liabilities. For leases and decommissioning liabilities, an entity is required to recognise the associated deferred tax assets and liabilities from the beginning of the earliest comparative period presented, with any cumulative effect recognised as an adjustment to retained earnings or other components of equity at that date. For all other transactions, an entity applies the amendments to transactions that occur after the beginning of the earliest period presented. The Group previously accounted for deferred tax on leases and decommissioning liabilities applying the 'integrally linked' approach, resulting in a similar outcome to the amendments, except that the deferred tax asset or liability was recognised on a net basis. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. However, there was no impact on the statement of financial position because the balances qualify for offset under paragraph 74 of MFRS 112. The key impact for the Group relates to disclosure of the deferred tax assets and liabilities recognised (see note 11). Global minimum top-up tax The Amendments to MFRS 112, Income Taxes – International Tax Reform – Pillar Two Model Rules provide a temporary mandatory exception from deferred tax accounting for the top-up tax that may arise from the jurisdictional adoption of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (“OECD”), and require new disclosures about the Pillar Two tax exposure. The mandatory exception is effective immediately and applies retrospectively. However, because no new legislation to implement the top-up tax was enacted or substantively enacted at 31 December 2022 in any jurisdiction in which the Group operates and no related deferred taxes were recognised at that date, the retrospective application has no impact on the Group’s consolidated financial statements. Material accounting policy information The Group adopted Amendments to MFRS 101, Presentation of Financial Statements – Disclosure of Accounting Policies for the first time in 2023. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements. The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements. IHH Healthcare Berhad 150
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