Notes to the Financial Statements (cont’d)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Significant Accounting Policies (cont’d)
Revenue Recognition (cont’d)
Revenue from workmanship charges are recognised when invoiced and upon services being rendered.
Dividend income is recognised when the right to receive payment is established.
Rental income from investment property is recognised in the income statements on a straight- line basis over the term of lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
Interest Income and Borrowing Costs
Interest income is recognised as it accrues, using the effective interest method.
All borrowing costs are recognised in the income statement using the effective interest method, in the period in which they are incurred except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use.
Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax liability is recognised for all taxable temporary differences.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Annual Report 2009