65
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
2.
Significant accounting policies
(continued)
2.20 Income taxes
(continued)
Current and deferred income taxes are recognised as income or expense in profit or loss, except
to the extent that the tax arises from a business combination or a transaction which is recognised
directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on
acquisition.
The Group accounts for investment tax credits (for example, productivity and innovative credit)
similar to accounting for other tax credits where deferred tax asset is recognised for unused tax
credits to the extent that it is probable that future taxable profit will be available against which the
unused tax credit can be utilised.
2.21 Provisions
Provisions for other liabilities and charges are recognised when the Group has a present legal
or constructive obligation as a result of past events, it is more likely than not that an outflow of
resources will be required to settle the obligation and the amount has been reliably estimated.
2.22 Employee compensation
Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an
asset.
(a)
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays
fixed contributions into separate entities such as the Central Provident Fund on a mandatory,
contractual or voluntary basis. The Group has no further payment obligations once the
contributions have been paid.
(b)
Performance shares
Benefits to employees including the directors are provided in the form of share-based
payment transactions, whereby employees render services in exchange for the shares or right
over shares (“equity-settled transactions”). The fair value of the employee services rendered
is determined by reference to the fair value of the shares awarded or granted, excluding the
impact of any non-market vesting conditions. The amount is determined by reference to the
fair value of the performance shares on the grant date. This fair value is recognised in profit
or loss over the vesting period of the share-based payment scheme with the corresponding
increase in equity. The value of charge is adjusted in profit or loss over the remaining vesting
period to reflect expected and actual levels of shares vesting with the adjustment made in
equity. Cancellations of grants of equity instruments during the vesting period (other than
a grant cancelled by forfeiture when the vesting conditions are not satisfied) are accounted
as an acceleration of vesting, therefore any amount unrecognised that would otherwise have
been charged is recognised immediately in profit or loss.
(c)
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liabilities for annual leave as a result of services rendered
by employees up to balance sheet date.
