Singapore Airlines 2014 Annual Report Download - page 126

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2014
SINGAPORE AIRLINES
2 Summary of Significant Accounting Policies (continued)
(aa) Taxation (continued)
(ii) Deferred tax (continued)
Deferred 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฀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 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 sufficient 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 in 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 each reporting period.
Deferred 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 tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity
and the same tax authority.
(iii) Indirect taxes
Revenues, expenses and assets are recognised net of the amount of indirect tax except:
•฀ Where฀the฀indirect฀tax฀incurred฀on฀a฀purchase฀of฀assets฀or฀services฀is฀not฀recoverable฀from฀the฀tax฀authority,฀in฀
which case the indirect tax is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
•฀ Receivables฀and฀payables฀that฀are฀stated฀with฀the฀amount฀of฀indirect฀tax฀included.
The net amount of indirect tax recoverable from, or payable to, the tax authority is included as part of receivables
or payables in the statement of financial position.