Singapore Airlines 2011 Annual Report Download - page 115

ANNUAL REPORT 2010/2011 113
NOTES TO THE FINANCIAL STATEMENTS
31 March 2011
2 Summary of Significant Accounting Policies (continued)
(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, 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 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.
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.