3. Significant accounting judgements and estimates (cont’d)
3.2 Key sources of estimation uncertainty (cont’d)
(g) Income taxes
Uncertainties exist with respect to the interpretation of complex tax regulations
and the amount and timing of future taxable income. Given the wide range of
international business relationships and the long-term nature and complexity of
existing contractual agreements, differences arising between the actual results and
the assumptions made, or future changes to such assumptions, could necessitate
future adjustments to tax provisions already recorded.
The Group establishes provisions, based on reasonable estimates, for possible
consequences of audits by the tax authorities of the respective countries in which
it operates. The amount of such provisions is based on various factors, such as
experience of previous tax audits and differing interpretations of tax regulations by
the taxable entity and the relevant tax authority. Such differences of interpretation
may arise on a wide variety of issues depending on the conditions prevailing in the
respective Group company’s domicile.
Deferred tax assets are recognised for all unused tax losses to the extent that it is
probable that taxable profit will be available against which the losses can be utilised.
Significant management judgement is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
The carrying amount of the Group’s income tax payables and deferred tax liabilities
at 30 June 2015 was $2,390,000 (2014: $4,160,000) and $17,075,000 (2014:
$16,570,000) respectively.
(h) Employee benefits
The costs of defined benefit pension plans and the present value of the pension
obligations are determined using actuarial valuations. The actuarial valuation
involved making various assumptions which includes the determination of the
discount rates, future salary increases, mortality age and future pension increases.
Due to the complexity of the valuation, the underlying assumptions and its long-term
nature, defined benefit obligations are sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date. The net benefit liability as at 30
June 2015 is $3,242,000 (2014: $3,648,000). Further details are provided in Note 19.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
105
