FIMA CORPORATION ANNUAL REPORT 2019

Notes To The

Financial Statements

As at 31 March 2019

Significant accounting policies (cont’d.)

2.3 Summary of significant accounting policies (cont’d.)

(v) Income taxes (cont’d.)

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting

date between the tax bases of assets and liabilities and their carrying amounts for financial

reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

where the deferred tax liability arises from the initial recognition of goodwill or 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 taxable temporary differences associated with investments in subsidiary

companies, associated companies and interests in joint ventures, where the timing of

the reversal of the temporary differences can be controlled and it is probable that the

temporary differences will not reverse in the foreseeable future.

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.

130

Fima Corporation Berhad

(21185-P)

Annual Report 2019