/ . 6 5
A N N U A L R E P O R T 2 0 1 5
T H E S T R E N G T H O F O U R B R A N D S
2 .
Summa r y o f S i gn i f i c an t ac coun t i ng Po l i c i e s ( Con t ’ d )
income Tax
The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have
been recognised in the financial statements or tax returns. The measurements of current and deferred tax liabilities
and assets are based on provisions of the enacted or substantially enacted tax laws; the effects of future changes in
tax laws or rates are not anticipated. Tax expense (tax income) is the aggregate amount included in the determination
of profit or loss for the reporting year in respect of current tax and deferred tax. Current and deferred income taxes
are recognised as income or as an expense in profit or loss unless the tax relates to items that are recognised in the
same or a different period outside profit or loss. For such items recognised outside profit or loss the current tax and
deferred tax are recognised (a) in other comprehensive income if the tax is related to an item recognised in other
comprehensive income and (b) directly in equity if the tax is related to an item recognised directly in equity. Deferred
tax assets and liabilities are offset when they relate to income taxes levied by the same income tax authority. The
carrying amount of deferred tax assets is reviewed at the end of each reporting year and is reduced, if necessary, by the
amount of any tax benefits that, based on available evidence, are not expected to be realised. A deferred tax amount is
recognised for all temporary differences, unless the deferred tax amount arises from the initial recognition of an asset
or liability in a transaction which (i) is not a business combination; and (ii) at the time of the transaction, affects neither
accounting profit nor taxable profit (tax loss).
Foreign Currency Transactions
The functional currency is the Singapore dollars as it reflects the primary economic environment in which the entity
operates. Transactions in foreign currencies are recorded in the functional currency at the rates ruling at the dates of the
transactions. At the end of each reporting year, recorded monetary balances and balances measured at fair value that
are denominated in non-functional currencies are reported at the rates ruling at the end of the reporting year and fair
value measurement dates respectively. All realised and unrealised exchange adjustment gains and losses are dealt with in
profit or loss except when recognised in other comprehensive income and if applicable deferred in equity such as for
qualifying cash flow hedges. The presentation is in the functional currency.
borrowing Costs
Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. The interest expense
is calculated using the effective interest rate method. Borrowing costs are recognised as an expense in the period in
which they are incurred except that borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset that necessarily take a substantial period of time to get ready for their intended use or
sale are capitalised as part of the cost of that asset until substantially all the activities necessary to prepare the qualifying
asset for its intended use or sale are complete.
