Maxis Berhad
Annual Report 2015
page
104
Notes to the Financial Statements
31 December 2015
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(w) Contingent liabilities
The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible
obligation that arises from past events whose existence will be confirmed by the occurrence of one or more uncertain future events
beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be
recognised because it cannot be measured reliably.
In the acquisition of subsidiaries by the Group under a business combination, the contingent liabilities assumed are measured initially at their
fair value at the acquisition date, irrespective of the extent of any non-controlling interests.
The Group recognises separately the contingent liabilities of the acquiree as part of allocating the cost of a business combination where their
fair values can be measured reliably. Where the fair values cannot be measured reliably, the resulting effect will be reflected in the goodwill
arising from the acquisition.
Subsequent to the initial recognition, the Group measures the contingent liabilities that are recognised separately at the date of acquisition at the
higher of the amount that would be recognised in accordance with the provisions of MFRS 137 “Provisions, Contingent Liabilities and Contingent
Assets” and the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with MFRS 118 “Revenue”.
(x) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers
comprising the Chief Executive Officer and the Chief Financial and Strategy Officer. The chief operating decision-makers are responsible
for allocating resources, assessing performance of the operating segments and making strategic decisions.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated by the Directors and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group and the Company make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely
equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material
impact on the Group’s and the Company’s results and financial position are tested for sensitivity to changes in the underlying parameters. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are outlined below.
(a) Intangible assets
The telecommunications licences with allocated spectrum rights are not subject to amortisation and are tested annually for impairment as
the Directors are of the opinion that the licences can be renewed in perpetuity at negligible cost and the associated spectrum rights, similar
to land, have an indefinite economic useful life. Correspondingly, deferred tax has not been recognised.
The estimated economic useful life reflects the Group’s expectation of the period over which the Group will continue to recover benefits
from the licence.
The economic useful life is periodically reviewed, taking into consideration such factors as changes in technology and the regulatory
environment. See Note 16 to the financial statements for the key assumptions on the impairment assessment of intangible assets.
