Page 151 - KPJ_2011

2. Summary of significant accounting policies (continued)
2.20 Leases (continued)
(b) As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are
classimed as operating leases. Initial direct costs incurred in negotiating an operating lease are added
to the carrying amount of the leased asset and recognised over the lease term on the same bases as
rental income.
2.21 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outnow of economic resources will be required to settle the obligation and the
amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to renect the current best estimate. Where the
effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
renects, where appropriate, the risks specimc to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognised as a mnance cost.
2.22 Employee benefits
(a) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the period
in which the associated services are rendered by employees of the Group. Short term accumulating
compensated absences such as paid annual leave are recognised when services are rendered by
employees that increase their entitlement to future compensated absences. Short term non-accumulating
compensated absences such as sick leave are recognised when the absences occur.
(b) Defined contribution plans
The Group participates in the national pension schemes as demned by the laws of the countries in which
it has operations. The Malaysian companies in the Group make contributions to the Employees Provident
Fund in Malaysia, a demned contribution pension scheme. Contributions to demned contribution pension
schemes are recognised as an expense in the period in which the related service is performed.
2.23 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benemts will now to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
(a) Sale of goods and rendering of services
Revenue from hospital operations comprises inpatient and outpatient hospital charges, consultation fees,
and sales of pharmaceutical products and medical supplies. These are recognised when services are
rendered and goods are delivered, net of discounts, rebates and returns.
Other hospital revenue mainly consists of clinic rental for consultants. These are recognised on an accrual
basis in accordance with the substance of the relevant agreements.
(b) Deferred revenue
Deferred revenue represents revenue billed in advance in relation to students’ fees, accommodation
fees, resident fees for retirement village and fees for other external courses. Amounts are included in the
mnancial statements as deferred revenue at the commencement of the course and recognised as revenue
on monthly basis over the duration of the course.
(c) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
ANNUAL REPORT 2011 146