continued - The Lion Group

3. SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Income Tax (continued)
Deferred tax is 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 tax rates that have been enacted or substantively 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
in equity, or when it arises from business combination that is an acquisition, in which case deferred tax is
included in the resulting goodwill or negative goodwill on acquisition.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when the deferred taxes relate to the same tax authority.
(e) Foreign Currencies
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“Functional Currency”). The
consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s
Functional Currency.
(ii) Foreign Currency Transactions
In preparing the financial statements of the individual entities, transactions in currencies other than
the entity’s Functional Currency (“Foreign Currencies”) are recorded in the functional currencies using
the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary
items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated
at the rates prevailing on the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are included in the income statement for the period except for exchange differences arising
on monetary items that form part of the Group’s net investment in foreign operation. Exchange
differences arising on monetary items that form part of the Group’s net investment in foreign operation,
where that monetary items are denominated in either the Functional Currency of the reporting
entity or the foreign operation, are initially taken directly to the foreign currency translation reserve
within equity until the disposal of the foreign operations, at which time they are recognised in the
income statement. Exchange differences arising on monetary items that form part of the Group’s net
investment in foreign operation, where that monetary items are denominated in a currency other
than the Functional Currency of either the reporting entity or the foreign operation, are recognised
in the income statement for the period. Exchange differences arising on monetary items that form
part of the Company’s net investment in foreign operation, regardless of the currency of the monetary
item, are recognised in the income statement in the Company’s financial statements or the individual
financial statements of the foreign operation, as appropriate.
Exchange differences arising on the translation of non-monetary items carried at fair value are included
in the income statement for the period except for the differences arising on the translation of nonmonetary
items in respect of which gains and losses are recognised directly in equity. Exchange
differences arising from such non-monetary items are also recognised directly in equity.
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