Maxis Berhad
Annual Report 2015
page
100
Notes to the Financial Statements
31 December 2015
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) Income taxes (continued)
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.
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 if there is no reasonable certainty that the Group will obtain ownership at the end of 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.
