Singapore Airlines 2010 Annual Report Download - page 109

ANNUAL REPORT 2009/10
107
2 Summary of Significant Accounting Policies (continued)
(v) Provisions (continued)
Provision for warranty claims is made for engine overhaul, repairs and maintenance of aircraft (excluding line
maintenance) based on past experience of the level of repairs.
Provision for return costs to meet contractual return aircraft minimum conditions, at the end of the lease terms for
the aircraft under operating leases, are recorded equally over the lease terms.
(w) Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly
attributable to the issuance of ordinary shares are deducted against share capital.
(x) 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.
(y) 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.
(z) Taxation
(i) Current 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 taxation 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.
Current taxes are recognised in profit or loss 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.