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109
Maxis Berhad
Annual Report 2014
Notes to the
Financial Statements
31 December 2014
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Provisions for liabilities and charges (continued)
(i) Site rectification and decommissioning works
Provision for site rectification works is based on management’s best estimate and the past trend of costs for rectification
works to be carried out to fulfil new regulatory guidelines and requirements imposed after network cell sites were built.
Provision for decommissioning works is the estimated costs of dismantling and removing the structures on identified sites and
restoring these sites. This obligation is incurred either when the items are installed or as a consequence of having used the
items during a particular period.
(ii) Contract obligations and legal claims
Provisions for contract obligations and legal claims are made in respect of network and content costs. Contract obligations are
measured at the lower of cost to fulfil the contract or the cost to exit it.
(iii) Staff incentive scheme
Provision for staff incentive scheme is based on management’s best estimate of the total amount payable as at reporting date
based on the performance of individual employees and/or financial performance of the Group.
(iv) Restructuring costs
Provision for restructuring costs is made in respect of employees termination payments under the Career Transition Scheme
(“CTS”) based on management’s best estimate of the amount payable as at reporting date offered to selected employees. See
accounting policy Note 3(t)(ii) on employee termination benefits.
(q) Income taxes
The tax expenses for the period comprise current and deferred tax. Tax is recognised in the statement of profit or loss except
to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
Current tax expenses are determined according to the tax laws of each jurisdiction in which the Group operates and include all
taxes based upon the taxable profits (including withholding taxes payable by foreign subsidiaries on behalf of their parent on
distribution of retained earnings to companies in the Group), and real property gains taxes payable on disposal of properties.
Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributed
to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at
the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
deductible temporary differences, investment tax allowance or unused tax losses can be utilised.
