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Asia Media Group Berhad
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Annual Report 2015
Notes to the Financial Statements
(continued)
pg.
92
4. Significant accounting judgements, estimates and assumptions
(cont’d)
(e) Impairment of investment in subsidiaries and recoverability of amount owing by
subsidiaries (cont’d)
Significant judgement is required in the estimation of the present value of future cash flows
generated by the subsidiaries, which involve uncertainties and are significantly affected
by assumptions used and judgement made regarding estimates of future cash flows and
discount rates. Changes in assumptions could significantly affect the results of the Group’s
tests for impairment of investment in subsidiaries.
(f) Allowances for impairment – trade and other receivables
The Group makes allowances for impairment based on an assessment of the recoverability
of receivables. Allowances for impairment are applied to receivables where events or
changes in circumstances indicate that the carrying amounts may not be recoverable.
Management specifically analysed historical bad debts, customer concentrations, customer
creditworthiness, current economic trends and changes in customer payment terms
when making a judgement to evaluate the adequacy of the allowance for impairment of
receivables. Where the expectation is different from the original estimate, such difference
will impact the carrying value of receivables. If the financial conditions of the customers of
the Group were to deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required.
(g) Deferred Tax Assets
Deferred tax assets are recognised for all unutilised tax losses and unabsorbed capital
allowances to the extent that it is probable that taxable profit will be available against which
the losses and capital allowances can be utilised. Significant management judgement is
required to determine the amount of deferred tax assets that can be recognised, based
upon the likely timing and level of future taxable profit together with future tax planning
strategies.