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NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2015
114
BLUE LABEL INTEGRATED ANNUAL REPORT 2015
1.
SIGNIFICANT ACCOUNTING POLICIES continued
Deferred taxation
Deferred taxation is provided using the liability method for all temporary differences arising between
the tax bases of assets and liabilities and their carrying values for financial reporting purposes.
However, if the deferred income tax arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss, it is not accounted for. Deferred income tax is determined using
tax rates (and laws) that have been enacted or substantively enacted by year-end and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised. Deferred income tax is
provided on temporary differences arising on investments in subsidiaries and associates, except where
the timing of the reversal of the temporary difference is controlled by the Group and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income 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 there is an intention to settle the balances on a net basis.
Dividends tax
Dividends tax is provided for at 15% of the amount of any dividend paid, subject to certain
exemptions. The dividends tax is a tax borne by the beneficial owner of the dividend and will be
withheld by either the issuer of the dividend or by regulated intermediaries.
Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade payables are classified as current liabilities if payment is due
within the normal operating cycle of the business. If not, they are presented as non-current liabilities.
Trade payables are measured initially at fair value and are subsequently measured at amortised cost,
using the effective interest rate method.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Group’s activities. Revenue is shown net of indirect taxes,
estimated returns, rebates and discounts, and after eliminated sales within the Group.
Revenue from the sale of goods and the rendering of services is recognised when it is probable that
the economic benefits associated with a transaction will flow to the Group and the amount of
revenue, and associated costs incurred or to be incurred, can be measured reliably.
Consideration received in advance of goods sold or services rendered is recorded in trade and other
payables as deferred revenue. The liability is reversed and the associated revenue is recognised only
when the risks and rewards of ownership of the goods are transferred to the customer or the service
has been rendered.