LEEKEE INDUSTRIES (M) SDN - teo seng capital berhad

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TEO SENG CAPITAL BERHAD (Incorporated In Malaysia) Company No : 732762 - T NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2011 4. ACCOUNTING POLICIES AND STANDARDS (CONT’D) 4.4 New/Revised Financial Reporting Standards (“FRSs”) That Are Not Yet Effective (Cont’d) FRSs and IC Interpretations (including the Consequential Amendments) Effective date IC Interpretation 17 : Distributions of Non-cash Assets to 1 July 2010 Owners IC Interpretation 18 : Transfers of Assets from Customers 1 January 2011 IC Interpretation 19 : Extinguishing Financial Liabilities with 1 July 2011 Equity Instruments Annual Improvements to FRSs (2010) 1 January 2011 The above accounting standards and interpretations (including the consequential amendments) are not relevant to the Group's operations except as follows :- (a) FRS 3 (Revised) introduces significant changes to the accounting for business combinations, both at the acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be applied prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year but may impact the accounting for future transactions or arrangements. (b) FRS 127 (Revised) requires accounting for changes in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The revised standard also requires all losses attributable to the minority interest to be absorbed by the minority interest instead of by the parent. The Group will apply the major changes of FRS 127 (Revised) prospectively and therefore there will be no financial impact on the financial statements of the Group for the current financial year but may impact the accounting of its future transactions or arrangements. Page 45
TEO SENG CAPITAL BERHAD (Incorporated In Malaysia) Company No : 732762 - T NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2011 4. ACCOUNTING POLICIES AND STANDARDS (CONT’D) 4.5 Critical Accounting Estimates and Judgements The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year, are discussed below : (a) Depreciation of property, plant and equipment The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (b) Income tax Significant judgement is required in determining the <strong>capital</strong> 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. The Group recognises liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions where applicable, in the period in which such determination is made. Page 46
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LEEKEE INDUSTRIES (M) SDN - teo seng capital berhad

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