FORGING AHEAD - Tradewinds Plantation Berhad
FORGING AHEAD - Tradewinds Plantation Berhad
FORGING AHEAD - Tradewinds Plantation Berhad
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4. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
4.14 Income taxes (continued)<br />
(b) Deferred tax<br />
Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying<br />
amount of an asset or liability in the statement of financial position and its tax base.<br />
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial<br />
recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction,<br />
affects neither accounting profit nor taxable profit.<br />
A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available<br />
against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The<br />
carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable<br />
that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be<br />
realised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable<br />
that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.<br />
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets<br />
against current tax liabilities and when the deferred income taxes relate to the same taxation authority on either:<br />
(i) the same taxable entity; or<br />
FINANCIAL STATEMENTS<br />
(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to<br />
realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts<br />
of deferred tax liabilities or assets are expected to be settled or recovered.<br />
Deferred tax will be recognised as income or expense and included in profit or loss for the period unless the tax<br />
relates to items that are credited or charged, in the same or a different period, directly to equity, in which case<br />
the deferred tax will be charged or credited directly to equity.<br />
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the<br />
asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively<br />
enacted by the end of the reporting period.<br />
TRADEWINDS PLANTATION BERHAD<br />
Annual Report 2010<br />
125