2.
BASIS OF PREPARATION (CONT'D)
2.6
Significant Accounting Estimates and Judgements (cont'd)
2.6.2
Key sources of estimation uncertainty (cont'd)
(iv)
Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective
evidence that a receivable 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 debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash
flows are estimated based on historical loss experience of assets with similar credit risk
characteristics.
(v)
Inventories
Inventories are measured at the lower of cost and net realisable value. In estimating net
realisable values, management takes into account the most reliable evidence available
at the time the estimate is made. Possible changes in these estimates could result in
revisions to the valuations of inventories.
3.
SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies adopted by the Group and by the Company are consistent with those
adopted in the previous financial years unless otherwise indicated below.
3.1
Basis of Consolidation
(i)
Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial
statements of subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable returns through its
power over the entity. Potential voting rights are considered when assessing control only when
such rights are substantive. The Group considers it has
de facto
power over an investee when,
despite not having the majority of voting rights, it has the current ability to direct the activities of
the investee that significantly affect the investee’s return.
Investment in subsidiaries is measured in the Company’s statement of financial position at cost
less any impairment losses, unless the investment is classified as held for sale or distribution. The
cost of investments includes transaction costs.
Upon disposal of investment in subsidiaries, the difference between the net disposal proceeds
and their carrying amount is included in profit or loss.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2014 (CONT’D)
Pentamaster Corporation Berhad
(572307-U)
•
Annual Report 2014
48
