45
SUNMOON FOOD COMPANY LIMITED
ANNUAL REPORT 2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
2.6
Employee benefits
Defined contribution plan
Payments to defined contribution plans are charged as an expense as they fall due. Payments made to
state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with
as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to
those arising in a defined contribution plan.
Pursuant to the relevant regulations of the PRC government, the Group participates in a local municipal
government retirement benefits scheme (the “Scheme”), whereby the PRC subsidiaries are required to
contribute a certain percentage of the basic salaries of its employees to the Scheme to fund their retirement
benefits. The local municipal government undertakes to assume the retirement benefits obligations of all
existing and future retired employees of the PRC subsidiaries.
The only obligation of the Group with respect to the Scheme is to pay the ongoing required contributions
under the Scheme mentioned above. The contributions to these Schemes are charged to profit or loss in the
period to which the contributions relate.
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. An accrual is made
for the estimated undiscounted liability for annual leave expected to be settled wholly within 12 months
from the reporting date as a result of services rendered by employees up to the end of the financial year.
2.7
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised as part of the cost of a qualifying asset. Capitalisation for borrowing costs commences
when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and
borrowing costs are incurred. Borrowing costs are capitalized until the assets are substantially completed
for their intended use or sale. All other borrowing costs are recognised as expenses in profit or loss in
the financial year in which they are incurred. Borrowing costs are recognised on in profit or loss using the
effective interest method and consist of interest and other costs that an entity incurs in connection with the
borrowing of funds.
