Singapore Airlines 2004 Annual Report Download - page 75

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SIA Annual Report 03/04
Notes to the Financial Statements
31 March 2004
2 Accounting Policies (continued)
(i) Investments
Investments held on a long-term basis are stated at cost and provisions are made for diminution in value which is
considered to be permanent. Short-term investments are stated at the lower of cost and net realizable value on a
portfolio basis.
(j) Stocks
Stocks are stated at the lower of cost and net realizable value. Cost is determined on either a first-in-first-out or
weighted average basis depending on the nature of the stocks. Net realizable value is the estimated selling price in
the ordinary course of business less estimated costs necessary to make the sale.
Work-in-progress is stated at cost plus estimated attributable profit.
(k) Trade debtors
Trade debtors are recognized and carried at original invoiced amount less an allowance for any uncollectible
amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad
debts are written-off as incurred.
Amounts owing by subsidiary, associated and joint venture companies are recognized and carried at cost less
provisions for any uncollectible amounts.
(l) Cash and bank balances
Cash and bank balances are defined as cash on hand, demand deposits and short-term, highly liquid investments
readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
Cash on hand, demand deposits and short-term deposits which are held to maturity are carried at cost.
For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents consist of cash on hand and
deposits in banks, net of outstanding bank overdrafts.
(m)Deferred taxation
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Additionally the Group’s deferred tax liabilities include all taxable temporary differences associated with investments
in subsidiary, associated and joint venture companies, except where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
Deferred tax assets are recognized for all deductible temporary differences and, carry forward of unused tax assets
and losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and, carry forward of unused tax assets and losses, can be utilized.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax assets to
be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Deferred tax is charged or credited directly to equity if the tax relates to items that are credited or charged in the
same or a different period, directly to equity.
(n) Loans, notes payable and borrowings
Loans, notes payable and other borrowings are recognized at cost.