NOTES
TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2016
(In Singapore dollars)
51
MTQ CORPORATION LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4
Significant accounting estimates and judgments
The preparation of the Group’s consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions
and estimates could result in outcomes that could require a material adjustment to the carrying amount of the
asset or liability affected in the future periods.
(a)
Judgments made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following judgments,
apart from those involving estimations, which has the most significant effect on the amounts recognised in
the consolidated financial statements:
Impairment of property, plant and equipment
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the
Group and to the particular assets and cash generating units of the assets that may lend to impairment.
These include financial performance, technology, economic and political environments and future industry
expectations. If an impairment trigger exists, the recoverable amount of the asset is determined. The
carrying amount of the Group’s property, plant and equipment are disclosed in Note 12.
Income taxes
The Group has exposure to income taxes in several jurisdictions. Significant judgment is involved in
determining the Group’s provision for income taxes. There are certain transactions and computations
for which the ultimate tax determination is uncertain during the ordinary course of business. The Group
recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recognised,
such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgment is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level
of future taxable profits together with future tax planning strategies.
The carrying amounts of the Group’s deferred tax assets, deferred tax liabilities and provision for taxation
as at 31 March 2016 amounted to $8,976,000 (2015: $6,947,000), $1,483,000 (2015: $2,466,000) and
$3,613,000 (2015: $7,269,000) respectively. The carrying amounts of the Company’s deferred tax liabilities
and provision for taxation as at 31 March 2016 amounted to $35,000 (2015: $93,000) and $391,000 (2015:
$809,000) respectively.
Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the Group
considers factors such as the probability of insolvency or significant financial difficulties of the debtors
and default or significant delay in payments. Further details on the carrying amounts of the Group’s trade
receivables balances are disclosed in Note 17.
