Annual Report 2010 - Leeden Limited

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.23 Treasury sharesThe Group’s own equity instruments, which are reacquired (treasury shares) are recognised at cost and deducted fromequity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equityinstruments. Any difference between the carrying amount of treasury shares and the consideration received is recogniseddirectly in equity.2.24 RevenueRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenuecan be reliably measured. Revenue is measured at the fair value of consideration received or receivable, excludingdiscounts, rebates, and sales taxes or duty. The Group assesses its revenue arrangements to determine if it is acting asprincipal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements.The following specific recognition criteria must also be met before revenue is recognised:• Revenue from goods is recognised upon the transfer of significant risk and rewards of ownership of the goodsto the customer which generally coincides with their delivery and acceptance. Revenue is not recognised to theextent where there are significant uncertainties regarding recovery of the consideration due, associated costs orthe possible return of goods.• Revenue from the provision of management services is recognised when the services are rendered (unlesscollectibility is in doubt).• Dividend income is recognised when the Group’s right to receive the payment is established.• Interest income is recognised using the effective interest method.• For development properties, it is recognised by reference to the stage of completion at the balance sheet date asstated in Note 2.15.• Rental income arising on welding machines and equipment is accounted for on a straight-line basis over the leaseterms.2.25 Employee benefits(a)Defined contribution plansThe Group participates in the national pension schemes as defined by the laws of the countries in which it hasoperations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fundscheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pensionschemes are recognised as an expense in the period in which the related service is performed.(b)Employee leave entitlementEmployee entitlements to annual leave are recognised as a liability when they accrue to the employees. Theestimated liability for leave is recognised for services rendered by employees up to balance sheet date.(c)Employee share option plansEmployees of the Group receive remuneration in the form of share options as consideration for services rendered.The cost of these equity-settled transactions with employees for awards granted after 22 November 2002 ismeasured by reference to the fair value of the options at the date on which the share options are granted whichtakes into account market conditions and non-vesting conditions. This cost is recognised in profit or loss, with acorresponding increase in the employee share option reserve, over the vesting period. The cumulative expenserecognised at each reporting date until the vesting date reflects the extent to which the vesting period has expiredand the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit orloss for a period represents the movement in cumulative expense recognised as at the beginning and end of thatperiod.60