Pg 147 - Berjaya Corporation Berhad

Berjaya Land Berhad (201765-A)
52
Annual Report 2005
Notes To The Financial Statements
30 April 2005
2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(k)
Employee benefits
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated
services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual
leave are recognised when services are rendered by employees that increase their entitlement to future compensated
absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences
occur.
(ii)
(iii)
Defined contribution plans
Contributions relating to defined contribution plans are charged to the income statement when incurred. Retirement benefits for
employees of foreign subsidiary companies are accrued for in accordance with the provisions of those foreign countries’
retirement law and are charged to income statement in the period to which they relate.
Defined benefit plans
Certain subsidiary companies within the Group operate unfunded, defined benefit Retirement Benefit Schemes (“the Scheme”)
for their eligible employees. The Group’s obligations under the Scheme are calculated using the Projected Unit Credit Method
determined based on actuarial computations by independent actuaries, through which the amount of benefit that employees
have earned in return for their service in the current and prior years is estimated. That benefit is discounted in order to
determine its present value. Actuarial gains and losses are recognised as income or expense over the expected average
remaining working lives of the participating employees when the cumulative unrecognised actuarial gains or losses for the
Scheme exceed 10% of the present value of the defined benefits obligation. Past service costs are recognised immediately to
the extent that the benefit are already vested, and otherwise is amortised on a straight-line basis over the average period until
the amended benefits become vested.
The amount recognised in the balance sheet represents the present value of the defined benefit obligations adjusted for
unrecognised actuarial gains and losses and unrecognised past service cost.
(l)
Income Taxes
Tax on profit or loss for the year comprises current and deferred tax. Current tax expense is the expected tax payable on the
taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax
payable in respect of the previous year.
Deferred tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Deferred tax is not recognised on temporary differences arising from
goodwill not deductible for tax purposes and the initial recognition of assets or liabilities that at the time of transaction affects neither
accounting nor taxable profit.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
Deferred tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in 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 or negative goodwill.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilised.
(m) Foreign Currencies
Transactions in foreign currencies are recorded in Ringgit Malaysia at rates of exchange ruling at the transaction dates or, where
settlement had not taken place at 30 April, at rates of exchange ruling at the date or at contracted rates, as applicable. Exchange
differences arising on long term inter-company advances that, in substance, form part of an enterprise’s net investment in a foreign
subsidiary are taken directly to an exchange reserve account. All other exchange differences arising are dealt with through the
income statement.