Axiom 2014 Annual Report - page 55

Notes to the Financial Statements
for the year ended 30 September 2014
53
2014 Annual Report
2. Significant accounting policies (continued)
Except for business combinations, no deferred income
tax is recognised from the initial recognition of an asset
or liability, where there is no effect on accounting or
taxable profit or loss.
Deferred tax assets and liabilities are calculated at
the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and
their measurement also reflects the manner in which
management expects to recover or settle the carrying
amount of the related asset or liability. With respect to
non-depreciable items of property, plant and equipment
measured at fair value and items of investment property
measured at fair value, the related deferred tax liability
or deferred tax asset is measured on the basis that the
carrying amount of the asset will be recovered entirely
through sale.
Deferred tax assets relating to temporary differences
and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be
available against which the benefits of the deferred tax
asset can be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where
a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will
occur. Deferred tax assets and liabilities are offset where:
(a) a legally enforceable right of set-off exists; and (b) the
deferred tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is
intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will
occur in future periods in which significant amounts
of deferred tax assets or liabilities are expected to be
recovered or settled.
k. Other receivables
Other receivables are initially recognised at fair value
and thereafter stated at amortised cost less allowance
for impairment of doubtful debts (see Note 2(i)(i)), except
where the receivables are interest-free loans made to
related parties without any fixed repayment terms or
the effect of discounting would be immaterial. In such
cases, the receivables are stated at cost less allowance
for impairment of doubtful debts.
l. Other payables
Other payables are initially recognised at fair value and
are subsequently stated at amortised cost unless the
effect of discounting would be immaterial, in which
case they are stated at cost.
m. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on
hand, demand deposits with banks and other financial
institutions, and short-term, highly liquid investments
that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes
in value, having been within three months of maturity at
acquisition. Bank overdrafts that are repayable on demand
and form an integral part of the Group’s cash management
are also included as a component of cash and cash
equivalents for the purpose of the cash flow statement.
n. Employee benefits
Salaries, annual bonuses, paid annual leave,
contributions to defined contribution retirement plans
and the cost of non-monetary benefits are accrued in
the year in which the associated services are rendered
by employees. Where payment or settlement is defined
and the effect would be material, these amounts are
stated at their present values. Superannuation is paid in
accordance with applicable local government legislation.
Short-term employee benefits
Provision is made for the Group’s obligation for short-
term employee benefits. Short-term employee benefits
are benefits (other than termination benefits) that are
expected to be settled wholly before 12 months after
the end of the annual reporting period in which the
employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are
measured at the (undiscounted) amounts expected to be
paid when the obligation is settled.
The Group’s obligations for short-term employee benefits
such as wages, salaries and sick leave are recognised
as a part of current trade and other payables in the
statement of financial position. The Group’s obligations
for employees’ annual leave and long service leave
entitlements are recognised as provisions in the statement
of financial position.
GROUP FINANCIAL REPORT
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