2012 Annual Report - Media Prima Berhad

AB CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(a)
Critical accounting estimates and assumptions (continued)
(i)
(ii)
Assessment of impairment of non-financial assets (excluding goodwill) (continued)
Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its
value-in-use (‘VIU’). The VIU is the net present value of the projected future cash flows derived from the
cash generating units discounted at an appropriate discount rate. Projected future cash flows are estimates
made based on historical, sector and industry trends, general market and economic conditions, changes
in technology and other available information.
Projected future cash flows are based on Group’s judgement in terms of assessing future uncertain
parameters such as estimated revenue growth, operating costs, margins, future inflationary figures,
appropriate discount rates and other available information. These judgements are based on the historical
track record and expectations of future events that are believed to be reasonable under the current
circumstances.
Contingent liabilities
The Group has several material pending legal cases which are disclosed in Note 43 to the financial
statements. The Directors, based on legal advice, have taken certain positions as to whether there will be
any future liabilities arising from these legal proceedings.
(iii) Deferred tax assets
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which the temporary differences can be utilised. This involves judgements regarding the
future financial performance of the particular entity in which the deferred tax asset has been recognised.
(iv) Estimation of income taxes
Income taxes are estimated based on the rules governed under the Income Tax Act, 1967. Significant
judgement is required in determining the capital allowances and deductibility of certain expenses during
the estimation of the provision for income taxes. There are many transactions and calculations for which
the ultimate tax determination is uncertain during the ordinary course of business.
Where the final tax outcome of these matters is different from the amounts that were initially recognised,
such differences will impact the income tax and deferred tax provisions in the financial year in which such
determination is made.
(b) Critical judgements in applying the Group’s accounting policies
There are no critical judgements made in applying the Group’s accounting policies.
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2012
From Our Perspective Who We Are Our Strategy & Achievements Our Performance Our Responsibility Our Leadership Corporate Governance The Financials Additional Information