47
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)
2.8
Taxes
(Continued)
Deferred tax (Continued)
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Group expects to recover or settle its assets and liabilities. Deferred tax assets and liabilities are offset
when there is a legally enforceable right to set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current
tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to
items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in
which case the tax is also recognised outside profit or loss (either in other comprehensive income or directly
in equity, respectively), or where they arise from the initial accounting for a business combination. In the
case of a business combination, the tax effect is taken into account in calculating goodwill or determining
the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities over cost.
Sales tax
Revenue, expenses and assets are recognised net of the amount of sales tax except:
•
when the sales taxation that is incurred on purchase of assets or services is not recoverable from
the taxation authorities, in which case the sales tax is recognised as part of 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.
2.9
Foreign currency transactions and translation
Items included in the individual financial statements of each entity in the Group are measured using the
currency of the primary economic environment in which the entity operates (“functional currency”).
The consolidated financial statements of the Group and the statement of financial position of the Company
are presented in Singapore dollar, which is the functional currency of the Company and the presentation
currency for the consolidated financial statements.
