Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
ANNUAL REPORT 2015
54
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.15
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required to settle the
obligation, the provision is reversed. If the effect of the time value of money is material, provisions are
discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a
finance cost.
2.16
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant
will be received and all attaching conditions will be complied with. Grants in respect of specific expenses
are taken to profit or loss in the same year as the relevant expenses.
2.17
Financial guarantees
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the terms of a debt instrument.
Financial guarantees are recognised initially as a liability at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial
guarantees are recognised as income in profit or loss over the period of the guarantee. If it is probable
that the liability will be higher than the amount initially recognised less amortisation, the liability is recorded
at the higher amount with the difference charged to profit or loss.
2.18
Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to
the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences
when the activities to prepare the asset for its intended use or sale are in progress and the expenditures
and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale. All other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of
funds.
2.19
Employee benefits
(a)
Defined contribution plans
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 defined contribution schemes are recognised as an expense in the period in which
the related service is performed.
