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Notes to the Consolidated Financial Statements


                                                                                                 31st March 2017


             4    CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED)


                  (e)  Recognition of deferred income tax assets

                       According  to  the  accounting  policy  as  stated  in  Note  2.20,  a  deferred  income  tax  asset  is
                       recognised to the extent that it is probable that future taxable profit will be available against which
                       the deductible temporary differences and tax losses can be utilised, and it is measured at the tax
                       rates that are expected to apply when the related deferred income tax asset is realised.


                       In  determining  the  deferred  income  tax  asset  to  be  recognised,  management  is  required  to
                       estimate  the  realisation  of  deferred  tax  assets.  Any  difference  between  these  estimates  and
                       the  actual  outcome  will  impact  the  Group’s  result  in  the  period  in  which  the  actual  outcome  is
                       determined.

                  (f)   Provision for other liabilities and charges


                       Provisions  are  recognised  when  the  Group  has  a  present  legal  or  constructive  obligation  as  a
                       result  of  past  events.  Significant  judgement  is  required  in  determining  the  provision  for  liabilities
                       and  charges.  The  Group’s  management  determines  the  provision  for  liabilities  and  charges  by
                       estimating the present value of the expenditures expected to be required to settle the obligation.
                       This assessment requires the use of estimation.

             5    REVENUE AND SEGMENT INFORMATION


                  Revenues recognised during the year are as follows:


                                                                                     2017             2016
                                                                                  HK$’000          HK$’000

                  Consumer electronic products                                   2,100,142        2,879,104


                  (a)  Segment analysed by products

                       The senior management (being the chief operating decision-maker) has determined the operating
                       segments  based  on  the  reports  reviewed  by  the  management.  The  chief  operating  decision-
                       makers have been identified as the executive directors and senior management who directly report
                       to the executive directors. The executive director and senior management reviewed the Group’s
                       internal reporting to assess performance and allocate resources. The management’s approach has
                       been used for the operating segment reporting.


                       The  Group  mainly  operates  in  the  People’s  Republic  of  China  (the  “PRC”),  Hong  Kong  and
                       Taiwan and is principally engaged in designing, manufacturing and selling of consumer electronic
                       products.








                                                                      ALCO HOLDINGS LIMITED  ANNUAL REPORT 2017  75
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