2007 Annual Report - Sun Life Financial

tAxAtION
The tax expense represents the sum of the final withholding taxes on interest income, tax
currently payable and deferred tax, if any.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from
net profit as reported in the statements of income because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are
never taxable or deductible.
EARNINGS PER ShARE
The Companies compute its basic earnings per share by dividing change in net assets
attributable to shareholders of the Companies by the average number of issued shares during
the period.
SUBSEQUENt EVENtS
The Companies identify subsequent events as events that occurred after the balance sheet
date but before the date when the financial statements were authorized for issue. Any
subsequent events that provide additional information about the Companies’ financial
position at the balance sheet date are reflected in the financial statements. Events that are non
adjusting events are disclosed in the notes to the financial statements when material.
5. CRItICAL ACCOUNtING JUDGMENtS AND KEy SOURCES OF
EStIMAtION UNCERtAINty
In the application of the Companies’ accounting policies, management is required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions
are based on the historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
CRItICAL JUDGMENtS IN APPLyING ACCOUNtING POLICIES
The following are the critical judgments, apart from those involving estimations, that
management have made in the process of applying the entity’s accounting policies and that
have the most significant effect on the amounts recognized in financial statements.
Fair value estimation
The fair value of financial instruments traded in active market is based on quoted market
prices at the balance sheet date. The fair values of investments in treasury notes are based on
quoted bid prices. Listed equity securities were valued at closing price in compliance with
SRC Rule 52.1 par. e, which states that securities shall be valued at the last sales price. If no
sale of such security is made on that date, bid prices will then be considered as the closing
price. The fair value of special savings accounts approximates its carrying value due to its
short-term nature.
2007 Annual Report 35