6 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at
the reporting date. 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.
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 significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below.
(a) 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 2.11. More regular reviews are performed if events indicate that this is necessary.
The recoverable amounts of cash-generating units have been determined based on fair value less cost to sell
calculations. The calculations require the use of estimates as set out in Note 19.
(b) Income tax
Significant estimation is involved in determining the provision for income taxes. There are certain tax allowances 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 taxes will be claimable. Where the final 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 13.
(c) Valuation of property, plant and equipment and investment properties
The Group carries certain property, plant and equipment and its investment properties at fair values. These require the
use of external valuers and assumptions that are based on unobservable inputs.
The key assumptions are as disclosed in Notes 16 and 17 to the financial statements.
267
KPJ Healthcare Berhad
Annual Report
2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
