Annual Report 2012 - IOI Group

NOTES TO THEFINANCIAL STATEMENTS5. SIGNIFICANT ACCOUNTING POLICIES (Continued)5.19 Employee Benefits (Continued)5.19.3 Equity compensation benefits (Continued)5.20 Income TaxesIn the event that modification increases the fair value of the equity instruments granted, measured immediatelybefore and after the modification, the Group includes the incremental fair value granted in the measurement of theamount recognised for services received as consideration for the equity instruments granted. The incremental fairvalue granted is the difference between the fair value of the modified equity instrument and that of the originalequity instrument, both estimated as at the date of the modification.If the modification occurs during the vesting period, the incremental fair value granted is included in themeasurement of the amount recognised for services received over the period from the modification date until thedate when the modified equity instruments vest, in addition to the amount based on the grant date fair value ofthe original equity instruments, which is recognised over the remainder of the original vesting period. If themodification occurs after vesting date, the incremental fair value granted is recognised immediately.If the Group modifies the terms and conditions of the equity instruments granted in a manner that reduces the totalfair value of the share-based payment arrangement, or is not otherwise beneficial to the employees, the Groupcontinues to account for the revised services received as consideration for the equity instruments granted as if thatmodification had not occurred, other than a cancellation of some or all of the equity instruments granted.Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes, such aswithholding taxes, which are payable by foreign subsidiaries, associates or jointly controlled entities on distributions to theGroup and Company, and real property gains taxes, if any.Taxation in profit or loss comprises current and deferred tax.5.20.1 Current taxCurrent tax expenses are determined according to the tax laws of each jurisdiction in which the Group operates andinclude all taxes based upon the taxable profits (including withholding taxes payable by foreign subsidiaries ondistribution of retained earnings to companies in the Group), and real property gains taxes payable on disposal ofproperties.5.20.2 Deferred taxDeferred tax is recognised in full using the liability method on temporary differences arising between the carryingamount of an asset or liability in the statement of financial position and its tax base.Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initialrecognition of an asset or liability in a transaction which is not a business combination and at the time of thetransaction, affects neither accounting profit nor taxable profit.A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available againstwhich the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carryingamount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable thatsufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised,the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficienttaxable profit will be available, such reductions will be reversed to the extent of the taxable profit.152IOI CORPORATION BERHADAnnual Report 2012