Maxis Berhad
Annual Report 2014
110
Notes to the
Financial Statements
31 December 2014
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) Income taxes (continued)
Deferred tax liability is recognised for all taxable temporary differences arising on investments in subsidiaries except for deferred
tax liability where the timing of the reversal of the temporary differences is controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised on deductible temporary differences arising from investments in subsidiaries, associates and
joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient
taxable profit available against which the deductible temporary difference can be utilised.
Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date
and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
The measurement of deferred tax liabilities and deferred tax assets shall reflect the tax consequences that would follow from the
manner in which the entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred and current tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority
or either the taxable entity or different taxable entities when there is an intention to settle the balances on a net basis.
(r) Finance leases and hire purchase agreements
Leases and hire purchases of assets where the Group assumes substantially all benefits and risks of ownership are classified as
finance leases.
Finance leases are capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease
payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of interest on
the finance lease balance outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings.
The interest element of the finance charge is charged to the statement of profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period.
Assets acquired under finance leases or hire purchase agreements are depreciated or amortised over the shorter of the estimated
useful life of the asset and the lease term.
(s) Operating leases
Leases of assets where a significant portion of risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases are charged to the statement of profit or loss on a straight line basis over
the lease period.
