Page 112 - CCL AR 2017 Final

In addition to the above standards and amendments, improvements to various accounting standards
have also been issued by the IASB in December 2016. Such improvements are generally effective for
accounting periods beginning on or after 01 January 2018. The Company expects that such improvements
to the standards will not have any material impact on the Company’s financial statements in the period
of initial application.

Further, following new standards have been issued by IASB which are yet to be notified by the SECP for
the purpose of applicability in Pakistan.

IASB effective date (annual
periods beginning on or after)

IFRS 9 – Financial Instruments: Classification and Measurement 01 January 2018

IFRS 14 – Regulatory Deferral Accounts 01 January 2016

IFRS 15 – Revenue from Contracts with Customers 01 January 2018

IFRS 16 – Leases 01 January 2019

IFRS 17 – Insurance Contracts 01 January 2021

2.5 Significant accounting judgments, estimates and assumptions
The preparation of the Company’s financial statements requires management to make judgments, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities and assets, at the end of the reporting period. However, uncertainty
about these estimates and judgments could result in outcomes that require a material adjustment to
the carrying amount of the asset or liability affected in future periods. The management continually
evaluates estimates and judgments which are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under current circumstances. Revisions
to accounting estimates are recognised prospectively.
In the process of applying the accounting policies, management has made the following estimates and
judgments which are significant to the financial statements:

2.5.1 Property, plant and equipment
The Company reviews appropriateness of the rate of depreciation, useful life and residual value used
in the calculation of depreciation. Further, where applicable, an estimate of the recoverable amount of
assets is made for possible impairment on an annual basis. In making these estimates, the Company uses
the technical resources available to the Company. Any change in the estimates in the future might affect
the carrying amount of respective item of operating property, plant and equipment, with corresponding
effects on the depreciation charge and impairment.

2.5.2 Taxation
Current

In applying the estimate for income tax payable, the Company takes into account the applicable tax laws
and the decision by appellate authorities on certain issues in the past. Instance where the Company’s
view differs from the view taken by the income tax department at the assessment stage and where the
Company considers that its view on items of material nature is in accordance with law, the amounts are
shown as contingency.
Deferred

Deferred tax is provided in full using the balance sheet liability method on all temporary differences
arising at the balance sheet date, between the tax bases of the assets and the liabilities and their carrying
amounts. Deferred tax liabilities are generally recognised for all taxable temporary differences and

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