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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
RETIREMENT BENEFIT COSTS
- Payments to defined contribution retirement benefit plans are charged as an expense
when employees have rendered the services entitling them to the contributions. Payments made to state-managed
retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined
contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution
retirement benefit plan.
EMPLOYEE LEAVE ENTITLEMENT
- Employee entitlements to annual leave are recognised when they accrue to employees.
A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the
reporting period.
GOVERNMENT GRANTS
- Government grants are not recognised until there is reasonable assurance that the Group will
comply with the conditions attaching to them and the grants will be received. Grants are recognised as income over
the periods necessary to match them with the costs for which they are intended to compensate.
INCOME TAX
- Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in statement
of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated
using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Co-operative and
subsidiaries operate by the end of the reporting period.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
