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Gamuda Berhad (29579-T) • Annual Report 2012
3.
Significant accounting estimates and judgements (cont’d.)
(d)
Deferred tax assets
Deferred tax assets are recognised for all unused tax losses, unabsorbed capital allowances and other
deductible temporary differences to the extent that it is probable that taxable profit will be available against
which the unused tax losses, unabsorbed capital allowances and other deductible temporary differences can
be utilised. Significant management judgement is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and level of future taxable profits together with future tax
planning strategies. The total carrying value of recognised and unrecognised tax losses, capital allowances and
other deductible temporary differences of the Group and of the Company are as disclosed in Note 33.
(e)
Impairment of investments
At reporting date, management determines whether the carrying amounts of its investments are impaired.
This involves measuring the recoverable amounts which includes fair value less costs to sell and valuation
techniques. Valuation techniques include the use of discounted cash flow analysis, considering the current
market value indicators and recent arms-length market transactions. These estimates provide reasonable
approximations to the computation of recoverable amounts.
In performing discounted cash flow analysis, discount rate and growth rates used reflect, amongst others, the
maturity of the business development cycle as well as the industry growth potential. The growth rates used
to forecast the projected cash flow for the following year approximate the performances of the respective
investments based on the latest available management accounts.
Based on management’s review, no further adjustments for impairment is required for the investments of the
Group and the Company during the current financial year.
(f)
Share-based payments to employees
The cost of providing share-based payments to employees and directors is charged to profit or loss over the
vesting period of the related share options. The cost is based on the fair value of the options and the number
of options expected to vest. The fair value of each option is determined using the binomial model valued by an
independent valuer.
The valuation of these share based payments requires judgements to be made in respect of the fair value
of the options and the number of options to be vested. Details of assumptions made in respect of the share
based payment scheme are disclosed in Note 28(f).
(g)
Defined benefit pension plans
The cost of defined benefit pension plans as well as the present value of the pension obligation is determined
using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected
rates of return of assets, future salary increases, mortality rates and future pension increases. The net
employee liability of the Group and the Company as at 31 July 2012 is RM12,088,000 (2011: RM14,374,000)
and RM1,545,000 (2011: RM2,164,000) respectively.
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012