Singapore Airlines 2011 Annual Report Download - page 116

SINGAPORE AIRLINES
114
NOTES TO THE FINANCIAL STATEMENTS
31 March 2011
2 Summary of Significant Accounting Policies (continued)
(z) Taxation (continued)
(ii) Deferred tax (continued)
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.
(aa) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured. Revenue is measured at the fair value of consideration
received or receivable.
Revenue is principally earned from the carriage of passengers, cargo and mail, engineering services,
training of pilots, air charters and tour wholesaling and related activities. Revenue for the Group
excludes dividends from subsidiary companies and intra-group transactions.
Passenger and cargo sales are recognised as operating revenue when the transportation is provided.
The value of unused tickets and air waybills is included in current liabilities as sales in advance of
carriage. The value of tickets and air waybills are recognised as revenue if unused after two years and
one year respectively.
Revenue from repair and maintenance of aircraft, engine and component overhaul is recognised based
on the percentage of completion of the projects. The percentage of completion of the projects is
determined based on the number of man-hours incurred to date against the estimated man-hours
needed to complete the projects.
Rental income from lease of aircraft is recognised on a straight-line basis over the lease term.
(ab) Income from investments
Dividend income from investments is recognised when the Group’s right to receive the payment
is established.
Interest income from investments and fixed deposits is recognised using the effective interest method.