SINGAPORE WINDSOR HOLDINGS LIMITED
| Annual Report 2015
48
Year ended 31 March 2015
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. A provision is made using best
estimates of the amount required in settlement and where the effect of the time value of money is material, the
amount recognised is the present value of the expenditures expected to be required to settle the obligation using
a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognised as interest expense. Changes in
estimates are reflected in profit or loss in the reporting year they occur.
Critical judgements, assumptions and estimation uncertainties
The critical judgements made in the process of applying the accounting policies that have the most significant
effect on the amounts recognised in the financial statements and the key assumptions concerning the future, and
other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities currently or within the next reporting year
are discussed below. These estimates and assumptions are periodically monitored to ensure they incorporate all
relevant information available at the date when financial statements are prepared. However, this does not prevent
actual figures differing from estimates.
Allowance for doubtful trade accounts:
An allowance is made for doubtful trade accounts for estimated losses resulting from the subsequent inability of the
customers to make required payments. If the financial conditions of the customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may be required in future periods. To the
extent that it is feasible impairment and uncollectibility is determined individually for each item. In cases where that
process is not feasible, a collective evaluation of impairment is performed. At the end of the reporting year, the
trade receivables carrying amount approximates the fair value and the carrying amounts might change materially
within the next reporting year but these changes may not arise from assumptions or other sources of estimation
uncertainty at the end of the reporting year. The carrying amount is disclosed in the note on trade and other
receivables.
3.
Related party relationships and transactions
FRS 24 defines a related party as a person or entity that is related to the reporting entity and it includes (a) A
person or a close member of that person’s family if that person: (i) has control or joint control over the reporting
entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel
of the reporting entity or of a parent of the reporting entity. (b) An entity is related to the reporting entity if any of
the following conditions apply: (i) The entity and the reporting entity are members of the same group. (ii) One entity
is an associate or joint venture of the other entity. (iii) Both entities are joint ventures of the same third party. (iv)
One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a
post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the
reporting entity. (vi) The entity is controlled or jointly controlled by a person identified in (a). (vii) A person identified
in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or
of a parent of the entity). (viii) The entity, or any member of a group of which it is a part, provides key management
personnel services to the reporting entity or to the parent of the reporting entity.
