57
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)
2.19 Provisions
Provisions are recognised when the Group and the Company has a present legal or constructive obligation
as a result of a past event, it is probable that the Group and the Company will be required to settle the
obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the financial year, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from
a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be
received and the amount of the receivable can be measured reliably.
Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or
loss when the changes arise.
2.20 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
Ordinary shares are classified as equity and recognised at the fair value of the consideration received.
Incremental costs directly attributable to the issuance of new equity instruments are shown in the equity as
a deduction from the proceeds.
2.21 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Executive Directors and
the Executive Chairman who make strategic decisions.
