2. Summary of significant accounting policies (cont’d)
2.24 Taxes (cont’d)
(b) Deferred tax (cont’d)
Tax benefits acquired as part of a business combination, but not satisfying the
criteria for separate recognition at that date, would be recognised subsequently if
new information about facts and circumstances changed. The adjustment would
either be treated as a reduction to goodwill (as long as it does not exceed goodwill)
if it is incurred during the measurement period or in profit or loss.
(c) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
• 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
recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
• receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority
is included as part of receivables or payables in the statements of financial position.
2.25 Hedge accounting
The Group applies hedge accounting for certain hedging relationships which qualify for
hedge accounting.
For purposes of hedge accounting, hedges are classified as
• Fair value hedges when hedging the exposure to changes in the fair value of a
recognised asset or liability or an unrecognised firm commitment, that is attributable
to a particular risk and could affect profit or loss; or
• Cash flow hedges when hedging exposure to variability in cash flows that is either
attributable to a particular risk associated with a recognised asset or liability or a
highly probable forecast transaction and could affect profit or loss.
At the inception of a hedge relationship, the Group formally designates and documents
the hedge relationship to which the Group wishes to apply hedge accounting and the
risk management objective and strategy for undertaking the hedge. The documentation
includes identification of the hedging instrument, the hedged item or transaction, the
nature of the risk being hedged and how the entity will assess the effectiveness of the
changes in the hedging instrument’s fair value in offsetting the exposure to changes in the
hedged item’s fair value or cash flows attributable to the hedged risk.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
98
