Page 58 - Inegrated Annual Report 2020-Eng

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 31 DECEMBER 2020

Deferred tax

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 the following temporary differences: 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, and differences
relating to investments in subsidiaries and joint venture to the extent that it is probable that they will not reverse
in the foreseeable future.

In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of
goodwill. 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, unused tax credits and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which the temporary difference
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.

Value added tax (VAT)

Expenses and assets are recognised net of the amount of VAT, except:

• When VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in
which case, VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item,
as applicable

• When receivables and payables are stated with the amount of VAT included

The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the consolidated statement of financial position.

Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses,
if any.

Cost includes expenditures that are directly attributable to the acquisition of the assets. The cost of self-
constructed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing
the asset to a working condition for its intended use, the costs of dismantling and removing the items and
restoring the site on which they are located and capitalised borrowing costs. Cost also may include transfer from
other comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency for purchase
of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

58 2020 Integrated Annual Report