KOTRA INDUSTRIES BERHAD - Kotra Pharma

KOTRA INDUSTRIES BERHAD
(Incorporated in Malaysia)
Company No. : 497632 – P
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007
6. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(o)
Income Taxes
Income taxes for the year comprise current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the
taxable profit for the year and is measured using the tax rates that have been
enacted or substantially enacted at the balance sheet date.
Deferred tax is provided in full, 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 liabilities are recognised for all taxable temporary differences other
than those that arise from goodwill or excess of the acquirer’s interest in the net
fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities
over the business combination costs or from the initial recognition of an asset or
liability in a transaction which is not a business combination and at the time of
the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets are recognised for all deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable that
future taxable profits will be available against which the deductible temporary
differences, unused tax losses and unused tax credits can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period when the asset is realised or the liability is
settled, based on the tax rates that have been enacted or substantially enacted
at the balance sheet date.
Deferred tax is recognised in the income statement, except when it arises from a
transaction which is recognised directly in equity, in which case the deferred tax
is also charged or credited directly to 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 excess of the acquirer’s interest in the net fair value of
the acquiree’s identifiable assets, liabilities and contingent liabilities over the
business combination costs. The carrying amounts of deferred tax assets are
reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient future taxable profits will be available to allow all
or part of the deferred tax assets to be utilised.
(p)
Government Grants
Government grants are recognised at fair value when there is reasonable
assurance that the Company will comply with the conditions attaching to them
and the grants will be received. Grants related to purchase of assets are treated
as deferred income and allocated to income statement over the useful lives of
the related assets while grants related to expenses are treated as other income
in the income statement.
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