Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

NOTES TO THEFINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012 (CONTINUED)3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(t) Income recognition (continued)(iii) Interest incomeInterest income is recognised on a time-proportion basis using the effective interest method. When areceivable is impaired, the Group and the Company reduce the carrying amount to its recoverableamount, being the estimated future cash flow discounted at the original effective interest rate of theinstrument, and continues unwinding the discount as interest income. Interest income on impaired loansis recognised using original effective interest rate.(iv) Dividend incomeDividend income from investment in subsidiaries, jointly controlled entities, associates and otherinvestments is recognised when a right to receive payment is established. This applies even if they arepaid out of pre-acquisition profits. However, the investment may need to be tested for impairment asa consequence.(v) Technical and management services feesTechnical and management services fees comprise of fees for provision of support services to certainsubsidiaries, which are recognised on an accrual basis.(vi) Other revenuesAll other revenues are recognised net of rebates or discounts upon the rendering of services or saleof products, when the transfers of risks and rewards have been completed.(u) Employee benefits(i)Short term employee benefitsWages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period inwhich the associated services are rendered by employees of the Group and the Company.(ii) Contribution to Employees Provident Fund (“EPF”)The Group’s and the Company’s contributions to EPF are charged to the profit or loss in the period towhich they relate. Once the contributions have been paid, the Group and the Company have no furtherpayment obligations. Prepaid contributions are recognised as an asset to the extent that a cash refundor a reduction in the future payments is available.(iii) Termination benefitsTermination benefits are payable whenever an employee’s employment is terminated before the normalretirement date or whenever an employee accepts voluntary redundancy in exchange for thesebenefits. The Group and the Company recognise termination benefits when it is demonstrablycommitted to either terminate the employment of current employees according to a detailed formalplan without possibility of withdrawal or to provide termination benefits as a result of an offer madeto encourage voluntary redundancy. Benefits falling due more than twelve (12) months after the endof the reporting period are discounted to present value.196