Singapore Airlines 2012 Annual Report Download - page 117

115ANNUAL REPORT 2011/2012
Notes to the Financial Statements
31 March 2012
2 Summary of Significant Accounting Policies (continued)
(x) 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.
(y) 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 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 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฀ 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.