Singapore Airlines 2014 Annual Report Download - page 125

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ANNUAL REPORT FY2013/14
2 Summary of Significant Accounting Policies (continued)
(y) Treasury shares
When shares are reacquired by the Company, the amount of consideration paid is recognised directly in equity.
Reacquired shares are classified as treasury shares and presented as a deduction from total equity. When treasury
shares are subsequently sold or reissued pursuant to equity compensation plans, the cost of treasury shares is reversed
from the treasury share account and the realised gain or loss on sale or reissue, net of any directly attributable
incremental transaction costs, is recognised in the capital reserve. Voting rights related to treasury shares are nullified
for the Group and no dividends are allocated to them respectively.
(z) Frequent flyer programme
The Company operates a frequent flyer programme called “KrisFlyer” that provides travel awards to programme
members based on accumulated mileage. A portion of passenger revenue attributable to the award of frequent flyer
benefits, estimated based on expected utilisation of these benefits, is deferred until they are utilised. These are included
under deferred revenue on the statement of financial position. Any remaining unutilised benefits are recognised as
revenue upon expiry.
(aa) Taxation
(i) Current income tax
Tax recoverable and tax liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the end of the reporting period, in the countries where the
Group operates and generates taxable income. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Current income taxes are recognised in the profit and loss account except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.
(ii) Deferred tax
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
•฀ Where฀ the฀ deferred฀ tax฀ liability฀ arises฀ from฀ the฀ initial฀ recognition฀ of฀ goodwill฀ or฀ of฀ an฀ asset฀ or฀ liability฀
in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
•฀ In฀respect฀of฀taxable฀temporary฀differences฀associated฀with฀investments฀in฀subsidiary,฀associated฀and฀joint฀
venture companies, 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.