Notestothefinancialstatements
For the financial year ended31December 2015
2.
Summaryof significant accountingpolicies (cont’d)
2.19
Taxes
(a)
Current income tax
Current income tax assets and liabilities for the current and prior periods aremeasured at the amount expected to be recovered from or paid to the
taxationauthorities. The tax ratesand tax lawsused tocompute theamountare those thatareenactedorsubstantivelyenactedat theendof the reporting
period, in the countrieswhere theGroupoperatesandgenerates taxable income.
Current income taxesare recognised in theprofit or lossexcept to theextent that the tax relates to items recognisedoutsideprofit or loss, either inother
comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulationsare subject to interpretationandestablishesprovisionswhereappropriate.
(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
liabilitiesand their carryingamounts for financial reportingpurposes.
Deferred tax liabilitiesare 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
combinationand, at the timeof the transaction, affectsneither theaccountingprofit nor taxableprofit or loss; and
– In respect of taxable temporarydifferencesassociatedwith investments insubsidiaries, associatesand interests in joint ventures,where the timing
of the reversal of the temporary differences can be controlled and it is probable that the temporary differenceswill not reverse in the foreseeable
future.
Deferred taxassetsare recognised forall deductible temporarydifferences, carry forwardofunused taxcreditsandunused tax losses, to theextent that it
isprobable that taxableprofitwill beavailableagainstwhich thedeductible temporarydifferences, and thecarry forwardofunused taxcreditsandunused
tax losses canbeutilisedexcept:
– where thedeferred taxasset relating to thedeductible temporarydifferencearises from the initial recognitionof anassetor liability ina transaction
that isnot abusiness combinationand, at the timeof the transaction, affectsneither theaccountingprofit nor taxableprofit or loss; and
– in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax
assets are recognised only to the extent that it is probable that the temporary differenceswill reverse in the foreseeable future and taxable profit
will beavailableagainstwhich the temporary differences canbeutilised.
2.
Summaryof significant accountingpolicies (cont’d)
2.19
Taxes (cont’d)
(b)
Deferred tax (cont’d)
Thecarryingamountofdeferred taxasset isreviewedat theendofeachreportingperiodandreduced to theextent that it isno longerprobable thatsufficient
taxableprofitwill beavailable toallowall orpartof thedeferred taxasset tobeutilised.Unrecogniseddeferred taxassetsare reassessedat theendofeach
reportingperiodandare recognised to theextent that it hasbecomeprobable that future taxableprofitwill allow thedeferred taxasset tobe recovered.
Deferred taxassetsand liabilitiesaremeasuredat the tax rates that areexpected toapply to the yearwhen theasset is realisedor the liability is settled,
basedon tax ratesand tax laws that havebeenenactedor substantively enactedat theendof each reportingperiod.
Deferred tax relating to items recognisedoutsideprofit or loss is recognisedoutsideprofit or loss. Deferred tax itemsare recognised incorrelation to the
underlying transactioneither inothercomprehensive incomeordirectly inequityanddeferred taxarising fromabusinesscombination isadjustedagainst
goodwill onacquisition.
(c)
Sales tax
Revenues, expensesandassetsare recognisednet of theamount of sales taxexcept:
– Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is
recognisedaspart of the cost of acquisitionof theasset or aspart of theexpense itemasapplicable; and
– Receivablesandpayables that are statedwith theamount of sales tax included.
2.20
Segment reporting
For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the
respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the
management of theCompanywho regularly review thesegment results inorder toallocate resources to thesegmentsand toassess thesegment performance.
Additional disclosures on each of these segments are shown inNote 4, including the factors used to identify the reportable segments and themeasurement
basisof segment information.
2.21
Sharecapital andshare issueexpenses
Proceeds from issuance of ordinary shares and warrants are recognised as share capital in equity. Incremental costs directly attributable to the issuance of
ordinary sharesandwarrantsaredeductedagainst share capital.
92
93
BAKERTECHNOLOGYlimited
ANNUAL REPORT 2015
