76
76
SINGAPORE SHIPPING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Exchange differences
Exchange differences comprise net foreign exchange gains or losses and net change in fair value of
foreign exchange options and forward contracts recognised in profit or loss.
The foreign exchange gains and losses are, however, reported separately if they are material.
(i) Taxation
Tax expense which comprises current and deferred tax, is recognised in profit or loss except to the
extent that it relates to a business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the financial
year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax
payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred
tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss;
• temporary differences related to investments in subsidiaries, associated companies and joint
ventures to the extent that the Group is able to control the timing of the reversal of the temporary
difference and it is probable that they will not reverse in the foreseeable future; and
• taxable temporary differences arising on the initial recognition of goodwill.
The measurement of deferred taxes reflects the tax consequences that would follow the manner in
which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets and they relate to taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realised simultaneously.
