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Notes to the
financial statements
For the financial year ended 31 December 2018
90
B A K E R T E C H N O L O G Y
L I M I T E D
2.
Summary of significant accounting policies (cont’d)
2.19
Employee benefits
(a)
Defined contribution plan
The Group participates in the national pension schemes as defined by the laws of the
countries in which it has operations. In particular, the Singapore companies in the Group make
contributions to the Central Provident Fund scheme in Singapore, a defined contribution
pension scheme. Contributions to a defined contribution pension scheme are recognised as
an expense in the period in which the related service is performed.
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they are accrued
to the employees. The estimated liability for leave is recognised for services rendered by
employees up to the end of the reporting period.
2.20
Leases
(a)
As lessee
Operating lease payments are recognised as an expense in the profit or loss on a straight-
line basis over lease term. The aggregate benefit of incentives provided by the lessor is
recognised as a reduction of rental expense over the lease term on a straight-line basis.
(b)
As lessor
Leases in which the Group does not transfer substantially all the risks and rewards of
ownership of the asset are classified as operating leases. Initial direct costs incurred in
negotiating an operating lease are added to the carrying amount of the leased asset and
recognised over the lease term on the same bases as charter hire. The accounting policy
for charter hire is set out in Note 2.21(d). Contingent rents are recognised as revenue in the
period in which they are earned.
2.21
Revenue
Revenue is measured based on the consideration to which the Group expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected
on behalf of third parties.
Revenue is recognised when the Group satisfies a performance obligation by transferring a promised
good or service to the customer, which is when the customer obtains control of the good or service.
A performance obligation may be satisfied at a point in time or over time. The amount of revenue
recognised is the amount allocated to the satisfied performance obligation.