ENRICHING LIVES EXPANDING HORIZONS - Maxis

132
Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS
31 December 2011
Continued
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Provisions for liabilities and charges (continued)
(i) Site rectification and decommissioning works (continued)
Provision for decommissioning works is the estimated costs of dismantling and removing the structures on identified sites
and restoring these sites. This obligation is incurred either when the items are installed or as a consequence of having
used the items during a particular period.
(ii) Network construction costs and settlements
Provisions for network construction costs and settlements are made in respect of network construction projects which
are under notices of termination, legal claims, negotiations for settlements and costs in respect of obligations under
network construction contracts.
(iii) Staff incentive scheme
Provision for staff incentive scheme is based on management’s best estimate of the amount payable as at reporting date
based on the performance of individual employees and financial performance of the Group.
(q) Income taxes
The tax expense for the period comprises current and deferred tax. Tax is recognised in income statement except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
Current tax expenses are determined according to the tax laws of each jurisdiction in which the Group operates and include
all taxes based upon the taxable profits (including withholding taxes payable by foreign subsidiaries on distribution of
retained earnings to companies in the Group), and real property gains taxes payable on disposal of properties.
Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts
attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which
the deductible temporary differences or unused tax losses can be utilised.
Deferred tax is recognised on temporary differences arising on investments in subsidiaries except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the reporting
date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
The measurement of deferred tax liabilities and deferred tax assets shall reflect the tax consequences that would follow from
the manner in which the entity expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.