Powering growth - Aztech Group Ltd - Investor Relations

F i n a n c i a l S t a t e m e n t sa z t e c h a n n u a l r e p o r t 2 0 0 9592 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)BORROWING COSTS - Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, which are assetsthat necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such timeas the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowingspending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.All other borrowing costs are recognised in profit or loss in the period in which they are incurred.RETIREMENT BENEFIT COSTS - Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments todefined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirementbenefit plan.EMPLOYEE LEAVE ENTITLEMENT - Employee entitlements to annual leave are recognised when they accrue to employees. A provision is madefor the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.PROFIT SHARING SCHEME - Certain directors are entitled to a share of the profit under the profit sharing scheme as disclosed in the Directors’Report. A provision is made for the estimated liability under the profit sharing scheme.INCOME TAX - Income tax expense represents the sum of the tax currently payable and deferred tax.The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensiveincome because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are nottaxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantivelyenacted in countries where the Group and the subsidiaries operate by the end of the reporting period.Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the correspondingtax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities aregenerally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxableprofits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if thetemporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in atransaction that affects neither the taxable profit nor the accounting profit.Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able tocontrol the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probablethat sufficient taxable profits will be available to allow all or part of the asset to be recovered.Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on thetax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.