APM AUTOMOTIVE HOLDINGS BERHAD
64
NOTES TO THE
FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(p) Income tax (continued)
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or
their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which temporary difference can be utilised. Deferred tax assets are reviewed at the end of
each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base
of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable
profits will be available against the unutilised tax incentive can be utilised.
(q) Earnings per ordinary share
The Group presents basic earnings per share data for its ordinary shares (EPS).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares
held.
(r)
Operating segments
An operating segment is a component of the Group that engaged in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. An operating segment’s operating results are reviewed regularly by
the chief operating decision makers, which in this case is the Executive Directors of the Group, to make
decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
(s) Fair value measurement
Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined
as 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 measurement assumes that the transaction
to sell the asset or transfer the liability takes place either in the principal market or in the absence of a
principal market, in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as
possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in
the valuation technique as follows:-
Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can
access at the measurement date.
Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3 : unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or
change in circumstances that caused the transfers.
