Pg 108 - Berjaya Corporation Berhad

Notes To The Financial Statements30 April 20082 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)2.5 Significant Accounting Estimates and Judgements(a) Critical judgements made in applying accounting policiesThe following are the judgements made by the management in the process of applying the Group’s accounting policiesthat have the most significant effect on the amounts recognised in the financial statements.Classification between investment properties and property, plant and equipmentThe Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as aninvestment property. Investment property is a property held to earn rentals or for capital appreciation or both.Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that isheld for own use. Since these properties cannot be sold separately and the portion held for own use is insignificant,the Group has classified the whole of the properties as investment properties.(b) Key sources of estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date,that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within thenext financial year are discussed below.(i)Impairment of goodwillThe Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of thevalue-in-use of the CGU to which goodwill is allocated. Estimating a value-in-use amount requires managementto make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount ratein order to calculate the present value of those cash flows.(ii) Deferred tax assetsDeferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extentthat it is probable that taxable profit will be available against which the losses and capital allowances can beutilised. Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profits together with future tax planningstrategies.(iii) Useful life of property, plant and equipmentThe Group estimates the useful lives of property, plant and equipment based on the period over which the assetsare expected to be available for use. The estimated useful lives of property, plant and equipment are reviewedperiodically and are updated if expectations differ from previous estimate due to physical wear and tear, technicalor commercial obsolescence and legal or other limits on the use of the assets.58 Berjaya Sports Toto Berhad (9109-K) Annual Report 2008