Page 87 - Annual report eng 2019

Tycoons Worldwide Group (Thailand) Plc.

5. Significant accounting judgements and estimates

The preparation of financial statements in conformity with financial reporting standards at times
requires management to make subjective judgements and estimates regarding matters that are
inherently uncertain. These judgements and estimates affect reported amounts and disclosures;
and actual results could differ from these estimates. Significant judgements and estimates are as

follows:

Decrease of inventories to net realisable value

In determining an decrease of inventories to net realisable value, the management makes
judgement and estimates net realisable value of inventory based on the amount the inventories

are expected to realise. These estimates take into consideration fluctuations of their selling price,
cost and expenses directly relating to events occurring after the end of the period. Also, the
management makes judgement and estimates expected loss from stock obsolescence based
upon aging profile of inventories and their current condition.

Property, plant and equipment and depreciation

In determining depreciation of plant and equipment, the management is required to make

estimates of the useful lives, units of production and residual values of the plant and equipment
and to review estimate useful lives, units of production and residual values when there are any

changes.

In addition, the management is required to review property, plant and equipment for impairment
on a periodical basis and record impairment losses when it is determined that their recoverable

amount is lower than the carrying amount. This requires judgements regarding forecast of future
revenues and expenses relating to the assets subject to the review.

Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences and unused tax losses
to the extent that it is probable that taxable profit will be available against which the temporary

differences and losses can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing

and level of estimate future taxable profits.

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