57
/ MTQ CORPORATION LIMITED /
ANNUAL REPORT
2014/2015
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.11 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the
activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs
are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or
sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other
costs that the Group incurs in connection with the borrowing of funds.
2.12 Income 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 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 all 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:
(i)
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
(ii)
in respect of taxable temporary differences associated with investments in subsidiaries 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.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilised except:
(i)
where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition 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
(ii)
in respect of deductible temporary differences associated with investments in subsidiaries and
interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
