Annual report 2014
83
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.11 Impairment of financial assets (continued)
Available-for-sale financial assets (continued)
Impairment losses in respect of unquoted equity instrument that is carried at cost is recognised in
profit or loss and is measured as the difference between the financial asset’s carrying amount and
the present value of estimated cash flows discounted at the current market rate of return for a similar
financial asset.
Impairment losses on available-for-sale equity instruments are not reversed in profit or loss in the
subsequent periods. Instead, any increase in the fair value subsequent to the impairment loss is
recognised in other comprehensive income.
Impairment losses on available-for-sale debt investments are subsequently reversed in profit or loss if
the increase in the fair value of the investment can be objectively related to an event occurring after
the recognition of the impairment loss in profit or loss.
4.12 Borrowing costs
Borrowing costs that are directly attributable to the acquisition or production of a qualified asset
is capitalised as part of the cost of the asset until when substantially all the activities necessary to
prepare the asset for its intended use or sale are complete, after which such expense is charged to
profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended
periods in which active development is interrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on
the borrowing during the period less any investment income on the temporary investment of the
borrowing.
All other borrowing cost is recognised in profit or loss in the period in which they are incurred.
4.13 Income taxes
Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include
other taxes, such as withholding taxes, which are payable by a foreign subsidiary, a joint venture or a
joint operation on distributions to the Group and Company, and real property gains taxed payable
on disposal of properties, if any.
Taxes in the profit or loss and other comprehensive income comprise current tax and deferred tax.
(a) Current tax
Current tax expenses are determined according to the tax laws of each jurisdiction in which
the Group operates and include all taxes based upon the taxable profits (including withholding
taxes payable by foreign subsidiaries on distribution of retained earnings to companies in the
Group), and real property gains taxes payable on disposal of properties.
(b) Deferred tax
Deferred tax is recognised in full using the liability method on temporary differences arising
between the carrying amount of an asset or liability in the statement of financial position and its
tax base.
