BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
100
Notes to the
Financial Statements
for the financial year ended 31December 2013
2.
Summaryof significantaccounting policies (cont’d)
2.24
Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching
conditionswill be compliedwith. It shall be recognised inprofit or lossona systematicbasisover theperiods inwhich theentity
recognises as expenses the related costs for which the grants are intended to compensate. Grants related to incomemay be
presented as a credit inprofit or loss, either separately or under ageneral heading such as “Other income”. Alternatively, they
are deducted in reporting the related expenses.
2.25
Relatedparties
A related party is defined as follows:
(a)
A person or a closemember of that person’s family is related to theGroup andCompany if that person:
(i)
has control or joint control over theCompany;
(ii)
has significant influence over theCompany; or
(iii) is amember of the keymanagement personnel of theGroup or Company or of a parent of theCompany.
(b)
An entity is related to theGroup and theCompany if any of the following conditions applies :
(i)
theentityand theCompanyaremembersof the samegroup (whichmeans that eachparent, subsidiaryand fellow
subsidiary is related to the others).
(ii)
one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a
group of which the other entity is amember).
(iii) both entities are joint ventures of the same thirdparty.
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v)
the entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity
related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to
theCompany.
(vi) the entity is controlled or jointly controlled by a person identified in (a).
(vii) a person identified in (a) (i) has significant influence over the entity or is a member of the key management
personnel of the entity (or of a parent of the entity).
3.
Significantaccounting judgementsand estimates
The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting
date. However, uncertainty about these assumptions and estimates could result in outcomes that require amaterial adjustment to
the carrying amount of the asset or liability affected in the future periods.
3.1
Judgmentsmade in applying accountingpolicies
In the process of applying the Group’s accounting policies, management has made the following judgments, apart from
those involving estimations, which have themost significant effect on the amounts recognised in the consolidated financial
statements:
