Year ended 31 March 2016
NOTES TO THE
FINANCIAL STATEMENTS
SINGAPORE MYANMAR INVESTCO LIMITED
| Annual Report 2016
49
3.
Significant accounting policies and other explanatory information (cont’d)
3A. Significant accounting policies (cont’d)
Foreign currency transactions
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 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.
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 entity operates. In translating the financial statements of an investee 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 profit
and loss items 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 investee.
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).
A deferred tax liability or asset is recognised for all taxable temporary differences associated with
investments in subsidiaries except where the reporting entity is able to control the timing of the reversal of
the taxable temporary difference and it is probable that the taxable temporary difference will not reverse in
the foreseeable future or for deductible temporary differences, they will not reverse in the foreseeable future
and they cannot be utilised against taxable profits.
