KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
ANNUAL REPORT 2014
71
NOTES
TO THE FINANCIAL STATEMENTS
3
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
3.14 Tax (Cont’d)
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 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.
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 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 income 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.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available against which
they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
In determining the amount of current and deferred tax, the Group takes into account the impact of
uncertain tax positions and whether additional taxes and interest may be due. The Group believes
that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many
factors, including interpretations of tax law and prior experience. This assessment relies on estimates
and assumptions and may involve a series of judgements about future events.
3.15 Earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders
of the Company by the weighted average number of ordinary shares outstanding during the year,
adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or
loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares,
which comprise convertible notes and share options granted to employees.
