2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.21 Revenue recognition (continued)
Rental income under operating leases is recognised in profit or loss on a straight-line basis over the
term of the lease.
Dividend income is recognised in profit or loss when the Group’s right to receive payment is
established.
2.22 Taxes
(a)
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted at
the end of the reporting period, in the countries where the Group operates and generates
taxable income.
Current income taxes are recognised in profit or loss except to the extent that the tax relates
to items recognised outside profit or loss, either in other comprehensive income or directly
in equity. Management periodically evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
(b)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the end of the
reporting period between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
–
Where the deferred tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss; and
–
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
71
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
