Singapore Airlines 2010 Annual Report Download - page 110

SINGAPORE AIRLINES
108
notes to the financial statements
31 march 2010
2 Summary of Significant Accounting Policies (continued)
(z) Taxation (continued)
(ii) Deferred tax (continued)
Deferred tax liabilities are recognised for all temporary differences, except:
• Where the deferred income 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.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses
can be utilised except:
• Where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition 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 deductible temporary differences associated with investments in subsidiary, associated and
joint venture companies, deferred income tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and
are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax
asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the end of the reporting period
Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive
income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill
on acquisition.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.