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JUMBO GROUP LIMITED
Notes to the Combined
Financial Statements
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and
interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each financial year and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based
on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the financial year. The measurement of
deferred tax liabilities and assets reflects the tax consequence that would follow from manner in which Group expects, at the end of the
financial year, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited
outside profit or loss (either in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit
or loss (either in other comprehensive income or directly in equity, respectively), or where they arise from the initial accounting for a
business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining
the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.
FOREIGN CURRENCY TRANSACTIONS AND TRANSLATIONS - The individual financial statements of each Group entity are measured and
presented in the currency of the primary economic environment in which the entity operates (its functional currency). The combined
financial statements of the Group are presented in Singapore dollars, which is the functional currency of the Group and the presentation
currency for the combined financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency
are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each financial year, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at the end of each financial year. Non-monetary items carried
at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or
loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit
or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses
are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also
recognised in other comprehensive income.
For the purpose of presenting combined financial statements, the assets and liabilities of the Group’s foreign operations (including
comparatives) are expressed in Singapore dollars using exchange rates prevailing on the end of the financial year. Income and expense
items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly
during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in a separate component of equity. On the disposal of a foreign operation,
the cumulative amount of the exchange differences relating to that foreign operation accumulated in a separate component of equity,
shall be reclassified from equity to profit or loss (as a reclassification adjustment) when the gain or loss on disposal is recognised.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items
that, in substance, form part of the net investment in foreign entities) are recognised in other comprehensive income and accumulated in
a separate component of equity (attributed to non-controlling interest, as appropriate).
