notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.27 Income taxes
(a)
Current tax
Current tax expense is determined according to the tax laws of each jurisdiction in which the Group and the Company operates and includes all taxes
based upon the taxable profits after taking into consideration available tax incentives.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other
comprehensive income or directly in equity.
(b)
Deferred tax
Deferred tax is recognised in full, using the liability method, on temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which
the deductible temporary differences or unused tax losses can be utilised.
Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction which
is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is recognised on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the
reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable
future. Generally the Group is unable to control the reversal of the temporary difference for associates. Only where there is an agreement in place that
gives the Group the ability to control the reversal of the temporary difference not recognised.
Deferred tax assets on any unutilised portion of tax incentives are recognised to the extent that it is probable that future taxable profits will be available
against which the unutilised tax incentives can be utilised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates
that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in the profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred
tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is
included in the resulting goodwill.
Deferred tax assets and liabilities are offset when the enterprise has a legally enforceable right to offset and intends to settle either on a net basis or
to realise the asset and settle the liability simultaneously.
2.28 Employee benefits
(a)
Short term benefits
Salaries, wages, bonuses and social security contributions are recognised as an expense in the financial year in which the services are rendered by
employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees
that increase their entitlements to future compensated absences, and short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur. Non-monetary benefits such as medical care, housing and other staff related expenses are charged to the profit
or loss as and when incurred.
84
Wah Seong Corporation Berhad • Annual Report 2014
