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Fima Corporation Berhad

(21185-P)

financial statements

114

NOTES TO THE FINANCIAL STATEMENTS

2.

SIGNIFICANT ACCOUNTING POLICIES (Cont’d.)

2.3 Summary of Significant Accounting Policies (Cont’d.)

(v) Income Tax (Cont’d.)

(ii) Deferred tax (Cont’d.)

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits

and unused tax losses, to the extent that it is probable that taxable profit will be available against which the

deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be

utilised except:

-

where the deferred tax asset relating to the deductible temporary difference arises from the initial

recognition of an asset or liability in a transaction that is not a business combination and, at the time of

the transaction, affects neither the accounting profit nor taxable profit or loss; and

-

in respect of deductible temporary differences associated with investments in subsidiary companies,

associated companies and interests in joint ventures, deferred tax assets are recognised only to the

extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable

profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that

it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset

to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to

the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when

the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or

substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred

tax items are recognised in correlation to the underlying transaction either in other comprehensive income

or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on

acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current

tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same

taxation authority.

(w) Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date. The fair value measurement is based on the presumption that

the transaction to sell the asset or transfer the liability takes place either:

-

In the principal market for the asset or liability, or

-

In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Company.