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Annual Report 2013
KPJ HEALTHCARE BERHAD
196
3.
Signi cant accounting judgements and estimates (continued)
3.2
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
signi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next nancial year are
discussed below.
(a)
Useful lives of property, plant and equipment
The cost of property, plant and equipment is depreciated on a straight-line basis over the property, plant and equipment’s
estimated economic useful lives. Management estimates the useful lives of these property, plant and equipment to be within
3 to 50 years. These are common life expectancies applied in the industry.
Changes in the expected level of usage and technological developments could impact the economic useful lives and the
residual values of these assets, therefore, future depreciation charges could be revised. Management will review the
estimated useful lives and residual values of property, plant and equipment at each nancial year-end and adjustments to
useful lives are made when considered necessary. Therefore, the future depreciation charges could be revised. The carrying
amount of the Group’s property, plant and equipment at the reporting dates are disclosed in Note 13.
(b)
Impairment of goodwill
The Group tests goodwill for impairment annually whether goodwill has suffered any impairment, in accordance with its
accounting policy stated in Note 2.10. More regular reviews are performed if events indicate that this is necessary.
The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. The
calculations require the use of estimates as set out in Note 20.
(c)
Income taxes
Signi cant estimation is involved in determining the 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 nal
tax outcome of these matters is different from the amount that were initially recognised, such differences will impact the
income tax and deferred tax provisions in the period in which such determination is made. Details of income tax expense are
disclosed in Note 10.
(d)
Deferred tax assets
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is
probable that taxable pro t will be available against which the losses and capital allowances can be utilised. Signi cant
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 pro ts together with future tax planning strategies. The total carrying value of
unrecognised tax losses of the Group are disclosed in Note 21.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)