Huawei 2014 Annual Report Download - page 77

75Consolidated Financial Statements Summary and Notes
of goodwill, the initial recognition of assets
or liabilities that affect neither accounting nor
taxable profit (provided they are not part of a
business combination), and temporary differences
relating to investments in subsidiaries to the
extent that, in the case of taxable differences,
the Group controls the timing of the reversal
and it is probable that the differences will not
reverse in the foreseeable future, or in the case
of deductible differences, unless it is probable
that they will reverse in the future.
The amount of deferred tax recognised is
measured based on the expected manner of
realisation or settlement of the carrying amount
of the assets and liabilities, using tax rates
enacted or substantively enacted at the end of
the reporting period. Deferred tax assets and
liabilities are not discounted.
The carrying amount of a deferred tax asset is
reviewed at the end of each reporting period
and is reduced to the extent that it is no longer
probable that sufficient taxable profits will be
available to allow the related tax benefit to be
utilised. Any such reduction is reversed to the
extent that it becomes probable that sufficient
taxable profits will be available.
Current tax balances and deferred tax balances,
and movements therein, are presented separately
from each other and are not offset. Current tax
assets are offset against current tax liabilities,
and deferred tax assets against deferred tax
liabilities, if the Group has the legally enforceable
right to set off current tax assets against current
tax liabilities and the following additional
conditions are met:
■ in the case of current tax assets and liabilities,
the Group intends either to settle on a net
basis, or to realise the asset and settle the
liability simultaneously; or
■ in the case of deferred tax assets and
liabilities, if they relate to income taxes levied
by the same taxation authority on either:
▲ the same taxable entity; or
▲ different taxable entities, which, in each
future period in which significant amounts
of deferred tax liabilities or assets are
expected to be settled or recovered,
intend to realise the current tax assets and
settle the current tax liabilities on a net
basis or realise and settle simultaneously.
(s) Revenue recognition
Revenue is measured at the fair value of the
consideration received or receivable. Provided
it is probable that the economic benefits will
flow to the Group and the revenue and costs, if
applicable, can be measured reliably, revenue is
recognised in profit or loss as follows:
i) Sale of goods and provision of services
Revenue from sale of goods is recognised
when the significant risks and rewards of
ownership of goods have been transferred to
the buyer. Revenue from provision of services
is recognised at the time when the services are
provided. No revenue is recognised if there are
significant uncertainties regarding the recovery
of the consideration due, associated costs or
the possible return of goods. Revenue excludes
value added tax or other sales taxes and is after
deduction of any trade discounts.
ii) Rental income from operating leases
Rental income receivable under operating
leases is recognised in profit or loss in equal
instalments over the periods covered by the
lease term, except where an alternative basis is
more representative of the pattern of benefits
to be derived from the use of the leased asset.
Lease incentives granted are recognised in profit
or loss as an integral part of the aggregate net