. 9 9
ANNUAL
REPORT
20 1 7
THE BE ST
I N US
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
2.
SUMMARYOF SIGNIFICANTACCOUNTINGPOLICIES (CONT’D)
2.18
Taxes (cont’d)
(b)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the end of the
reportingperiodbetween the taxbasesofassetsand liabilitiesand theircarryingamounts for financial
reportingpurposes.
Deferred tax liabilities are recognised for all temporarydifferences, except:
– Where thedeferred tax liability arises from the initial recognitionof goodwill or of anasset or
liability in a transaction that is not abusiness combinationand, at the timeof the transaction,
affects neither the accountingprofit nor taxableprofit or loss; and
– In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, where the timing of the reversal of the temporary
differencescanbecontrolledand it isprobable that the temporarydifferenceswill not reverse
in the foreseeable future.
Deferred tax assets are recognised for all deductible temporarydifferences, carry forwardof unused
tax credits andunused tax losses, to the extent that it is probable that taxableprofit will be available
againstwhich thedeductible temporarydifferences, and thecarry forwardof unused taxcredits and
unused tax losses canbeutilisedexcept:
– where the deferred tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination
and, at the timeof the transaction, affects neither the accountingprofit nor taxable profit or
loss; and
– in respect of taxable temporary differences associated with investments in subsidiaries,
associatesand interests in joint ventures, deferred taxassetsare recognisedonly to theextent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxableprofitwill be available againstwhich the temporarydifferences canbeutilised.
Thecarryingamountofdeferred taxasset is reviewedat theendofeach reportingperiodand reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all
or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at
the endof each reportingperiod and are recognised to the extent that it has becomeprobable that
future taxableprofitwill allow thedeferred tax asset tobe recovered.
Deferred tax assets and liabilities aremeasured at the tax rates that areexpected to apply to the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enactedor substantively enacted at theendof each reportingperiod.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in other
comprehensive incomeor directly in equity anddeferred tax arising from a business combination is
adjusted against goodwill on acquisition.
