Singapore Airlines 2016 Annual Report Download - page 131

2 Summary of Significant Accounting Policies (continued)
(z) Taxation
(i) Current income tax
Tax recoverable and tax liabilities for current and prior periods are measured at the amount expected to be recovered from or
paid to, respectively, 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 income taxes are recognised in the profit and loss account except to the extent that the tax relates to a business combination,
or items recognised outside profit or loss, either in other comprehensive income or directly in equity.
(ii) Deferred tax
Deferred tax is provided, using the balance sheet method, on all temporary dierences 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 dierences, except:
• Wherethedeferred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, aects neither the accounting profit nor taxable profit or
loss; and
• Inrespectoftaxabletemporarydierencesassociatedwithinvestmentsinsubsidiary,associatedandjointventurecompanies,
where the timing of the reversal of the temporary dierences can be controlled and it is probable that the temporary dierences
will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary dierences, 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 dierences, 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dierence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, aects neither the accounting
profit nor taxable profit or loss; and
• Inrespectofdeductibletemporarydierences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 dierences will reverse
in the foreseeable future and taxable profit will be available against which the temporary dierences can be utilised.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that suicient 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 is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly
in equity or in other comprehensive income.
Deferred tax assets and deferred tax liabilities are oset, if a legally enforceable right exists to set o current income tax assets
against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same tax authority.
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