SINGAPORE WINDSOR HOLDINGS LIMITED
| Annual Report 2015
41
Year ended 31 March 2015
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
Income tax
The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable
or refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events
that have been recognised in the financial statements or tax returns. The measurements of current and deferred
tax liabilities and assets are based on provisions of the enacted or substantially enacted tax laws; the effects of
future changes in tax laws or rates are not anticipated. Tax expense (tax income) is the aggregate amount included
in the determination of profit or loss for the reporting year in respect of current tax and deferred tax. Current and
deferred income taxes are recognised as income or as an expense in profit or loss unless the tax relates to items
that are recognised in the same or a different period outside profit or loss. For such items recognised outside profit
or loss the current tax and deferred tax are recognised (a) in other comprehensive income if the tax is related to an
item recognised in other comprehensive income and (b) directly in equity if the tax is related to an item recognised
directly in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
income tax authority. The carrying amount of deferred tax assets is reviewed at each end of the reporting year and
is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to
be realised. A deferred tax amount is recognised for all temporary differences, unless the deferred tax amount
arises from the initial recognition of an asset or liability in a transaction which (i) is not a business combination; and
(ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Foreign currency transactions
The functional currency is the Hong Kong dollar as it reflects the primary economic environment in which the entity
operates. Transactions in foreign currencies are recorded in the functional currency at the rates ruling at the dates
of the transactions. At each end of the reporting year, recorded monetary balances and balances measured at fair
value that are denominated in non-functional currencies are reported at the rates ruling at the end of the reporting
year and fair value measurement dates respectively. All realised and unrealised exchange adjustment gains and
losses are dealt with in profit or loss except when recognised in other comprehensive income and if applicable
deferred in equity such as for qualifying cash flow hedges. The presentation is in the functional currency.
Translation of financial statements of other entities
Each entity in the group determines the appropriate functional currency as it reflects the primary economic
environment in which the relevant reporting entity operates. In translating the financial statements of such an entity
for incorporation in the consolidated financial statements in the presentation currency the assets and liabilities
denominated in other currencies are translated at end of the reporting year rates of exchange and the income
and expense items for each statement presenting profit or loss and other comprehensive income are translated
at average rates of exchange for the reporting year. The resulting translation adjustments (if any) are recognised in
other comprehensive income and accumulated in a separate component of equity until the disposal of that relevant
reporting entity.
Segment reporting
The group discloses financial and descriptive information about its reportable segments. Reportable segments
are operating segments or aggregations of operating segments that meet specified criteria. Operating segments
are components about which separate financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing the performance. Generally,
financial information is reported on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.
Borrowing costs
Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. The interest
expense is calculated using the effective interest rate method. Borrowing costs are recognised as an expense in
the period in which they are incurred except that borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset that necessarily take a substantial period of time to get ready
for their intended use or sale are capitalised as part of the cost of that asset until substantially all the activities
necessary to prepare the qualifying asset for its intended use or sale are complete.
