98
Baker Technology LimitedAnnual Report 2014
2.
Summaryof significant accountingpolicies (cont’d)
2.20
Taxes
(a)
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted at the end
of the reportingperiod, in the countrieswhere theGroupoperates andgenerates taxable income.
Current income taxes are recognised in the profit or loss except to the extent that the tax relates to
items recognised outside profit or loss, either in other comprehensive income or directly in equity.
Managementperiodicallyevaluatespositions taken in the tax returnswith respect tosituations inwhich
applicable tax regulationsaresubject to interpretationandestablishesprovisionswhereappropriate.
(b)
Deferred tax
Deferred tax isprovidedusing the liabilitymethodon temporarydifferences at thebalance sheet date
betweenthetaxbasesofassetsand liabilitiesandtheircarryingamounts forfinancial reportingpurposes.
Deferred tax liabilities are recognised for all temporarydifferences, except:
-
Where thedeferred tax liabilityarises from the initial recognitionofgoodwill orof anassetor
liability ina transaction that isnot abusiness combinationand, at the timeof the transaction,
affectsneither theaccountingprofit nor taxableprofit or loss; and
-
In respectof taxable temporarydifferencesassociatedwith investments in subsidiaries, associates
and interests in jointventures,where the timingof the reversalof the temporarydifferencescanbe
controlledand it isprobablethatthetemporarydifferenceswillnotreverse intheforeseeablefuture.
Deferred taxassetsare recognised foralldeductible temporarydifferences, carry forwardofunused
taxcreditsandunused tax losses, to theextent that it isprobable that taxableprofitwill beavailable
againstwhich thedeductible temporarydifferences, and thecarry forwardofunused taxcreditsand
unused tax losses canbeutilisedexcept:
-
where the deferred tax asset relating to the deductible temporary difference arises from the
initial recognitionofanassetor liability ina transaction that isnotabusinesscombinationand,at
the timeof the transaction, affectsneither theaccountingprofitnor taxableprofitor loss; and
-
in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the
extent that it isprobable that the temporarydifferenceswill reverse in the foreseeable future
and taxableprofitwill beavailableagainstwhich the temporarydifferences canbeutilised.
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31December 2014
