HAW PAR CORPORATION LIMITED - ANNUAL REPORT 2015 - page 69

For the financial year ended 31 December 2015
67
ANNUAL REPORT 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(k) Operating leases
(1) When a group company is the lessee:
Leases of property, plant and equipment where a substantial portion of the risks and rewards of ownership
is retained by the lessor are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period
of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to be made
to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.
(2) When a group company is the lessor:
Leases of investment properties to third parties where the Group retains substantially all risks and rewards
incidental to ownership of the leased assets are classified as operating leases.
Rental income from operating leases (net of any incentives given to lessees) is recognised in profit or loss on
a straight-line basis over the lease term.
When an operating lease is terminated before the lease period has expired, any payment required to be
made by the lessee by way of penalty is recognised as an income in the period in which termination takes
place, provided collection is reasonably assured.
(l) Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.
Trade and other payables are initially recognised at fair value, and subsequently measured at amortised cost, using
the effective interest method.
(m) Income taxes
Current income tax for current and prior periods are recognised at the amounts expected to be paid to or
recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively
enacted by the end of the reporting period.
Deferred income tax are recognised for all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements except when the deferred income tax arise from
the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and at
the time of the transaction, affects neither accounting nor taxable profit or loss.
Deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and
associated companies, except where the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
NOT E S TO T H E F I NAN C I A L S TAT EME N T S
(CONTINUED)
1...,59,60,61,62,63,64,65,66,67,68 70,71,72,73,74,75,76,77,78,79,...123
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