Notes to the Financial Statements - Swissco Holdings Limited

Notes
to the Financial Statements
For the financial year ended 31 December 2009
33. Critical accounting estimates, assumptions and judgements
Estimates, assumptions and judgements are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The critical areas for the Group are as follows:
(a)
Useful lives and residual values
The Group reviews the useful lives and residual values of its vessels and barges at each financial yearend
and any adjustments are made on a prospective basis. If estimates of the residual values are
revised, the amount of depreciation expenses in the future periods will be changed.
The useful lives of the vessels and barges are assessed periodically based on the condition of the
vessels and barges, market conditions and other regulatory requirements. If the estimates of useful lives
for the vessels and barges are revised or there is a change in useful lives, the amount of depreciation
expense recorded in future periods will be changed.
(b)
Income taxes
The Group has exposure to incomes taxes primarily in Singapore. Significant judgment is involved in
determining the provision for income taxes.
The Group recognises liabilities for expected tax matters based on estimates of whether additional
taxes will be due. Where the final tax outcome of these matters is different from the amounts that
were initially recognised, such differences may impact the income tax and deferred tax provisions in
the period in which such determination is made. The carrying amounts of the Group’s current tax and
deferred tax liabilities at 31 December 2009 were $744,348 (2008: $626,439) and $1,087,180 (2008:
$101,530) respectively.
34. New or revised standards and interpretations
Certain new standards, amendments and interpretations to existing standards have been published and are
mandatory for the Group’s accounting periods beginning on or after 1 January 2010 or later periods and
which the Group has not early adopted. The Group’s assessment of the impact of adopting those standards,
amendments and interpretations that are relevant to the Group is set out below:
(a)
(b)
FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual periods
beginning on or after 1 July 2009)
FRS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in
equity if there is no change in control and these transactions will no longer result in goodwill or gains
and losses. The standard also specifies the accounting when control is lost. Any remaining interest in
the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. The Group will
apply FRS 27 (revised) prospectively to transactions with minority interests from 1 January 2010.
FRS 103 (revised) Business Combinations (effective for annual periods beginning on or after 1 July
2009)
FRS 103 (revised) continues to apply the acquisition method to business combinations, with some
significant changes. For example, all payments to purchase a business are to be recorded at fair value
at the acquisition date, with contingent payments classified as debt subsequently re-measured through
profit or loss. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling
interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s net assets. All acquisition-related costs should be expensed. The Group will apply FRS
103 (revised) prospectively to all business combinations from 1 January 2010.
83 Annual Report 2009 Swissco International Limited