Annual Report 2010 - Leeden Limited

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A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.27 Income taxes (cont’d)(b)Deferred taxDeferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits andunused tax losses, to the extent that it is probable that taxable profit will be available against which the deductibletemporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:• where the deferred income tax asset relating to the deductible temporary difference arises from the initialrecognition of an asset or liability in a transaction that is not a business combination and, at the time of thetransaction, affects neither the accounting profit nor taxable profit or loss; and• in respect of deductible temporary differences associated with investments in subsidiary companies,associated companies and interests in joint ventures, deferred income tax assets are recognised only to theextent that it is probable that the temporary differences will reverse in the foreseeable future and taxableprofit will be available against which the temporary differences can be utilised.The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent thatit is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset tobe utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised tothe 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 to the year when theasset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantivelyenacted at the balance sheet date.Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferredtax items are recognised in correlation to the underlying transaction either in other comprehensive income or directlyin equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists toset off current tax assets against current income tax liabilities and the deferred income taxes relate to the sametaxable entity and the same taxation authority.(c)Sales tax2.28 Segment reportingRevenues, expenses and assets are recognised net of the amount of sales tax except:• Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxationauthority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as partof the expense item as applicable; and• Receivables and payables that are stated with the amount of sales tax included.The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivablesor payables in the balance sheet.For management purposes, the Group is organised into operating segments based on their products and services whichare independently managed by the respective segment managers responsible for the performance of the respectivesegments under their charge. The segment managers report directly to the management of the Company who regularlyreview the segment results in order to allocate resources to the segments and to assess the segment performance.Additional disclosures on each of these segments are shown in Note 40, including the factors used to identify thereportable segments and the measurement basis of segment information.62
Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.29 ContingenciesA contingent liability is:(a)(b)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence ornon-occurrence of one or more uncertain future events not wholly within the control of the Group; ora present obligation that arises from past events but is not recognised because:(i)(ii)It is not probable that an outflow of resources embodying economic benefits will be required to settle theobligation; orThe amount of the obligation cannot be measured with sufficient reliability.2.30 Government grantsA contingent asset is a possible asset that arises from past events and whose existence will be confirmedonly by the occurrence or non-occurrence of one or more uncertain future events not wholly within the controlof the Group.Contingent liabilities and assets are not recognised on the balance sheet of the Group.Government grants are recognised at their fair values when there is reasonable assurance that the grant will be receivedand all attaching conditions will be compiled with. Grants in recognition of specific expenses are taken to income in thesame year as the relevant expenses.2.31 Related partiesA party is considered to be related to the Group if:(a)The party, directly or indirectly through one or more intermediaries,(i)(ii)(iii)controls, is controlled by, or is under common control with, the Group;has an interest in the Group that gives it significant influence over the Group; orhas joint control over the Group;(b)(c)(d)(e)(f)The party is an associate;The party is a jointly-controlled entity;The party is a member of the key management personnel of the Group or its parent;The party is a close member of the family of any individual referred to in (a) or (d); orThe party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant votingpower in such entity resides with, directly or indirectly, any individual referred to in (d) or (e).63
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Annual Report 2010 - Leeden Limited

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