2018 UEM Edgenta Annual Report

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D.) 2.5 Significant accounting judgements and estimates (cont’d.) (b) Key sources of estimation uncertainty (cont’d.) 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 as follows: (cont’d.) (vi) Deferred tax assets Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The deferred tax assets amounting to RM13.0 million (2017: RM14.5 million) are mainly related to subsidiaries of which management are confident that it would be probable for the related subsidiaries to generate future taxable profits. If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increased by RM9.8 million (2017: RM8.9 million). Further details are disclosed in Note 32. (vii) Deferred consideration payable Deferred consideration payable arose from the acquisition of KFM Holdings Sdn. Bhd. (“KFM”) in prior year. At each reporting period, the Group assesses the fair value of the deferred consideration payable based on the projected profitability of KFM, and considers the current and projected market conditions. During the year, management assessed the fair value of the remaining deferred consideration payable for KFM to be RM8.7 million (2017: RM17.9 million) due to lower probability of KFM meeting the performance targets. Accordingly, an amount of RM9.3 million (2017: RM5.8 million) was recognised in profit or loss representing the fair value changes relating to the deferred consideration payable during the current financial year. Further details of the deferred consideration payable are disclosed in Note 31(d). Financial Review Stakeholder Information AGM Information 183 Governance Review of Sustainability Activities