Basic HTML Version
Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
Annual Report 2011 /
1
2
Significant accounting policies
(continued)
(u) Income tax
(continued)
Additional income taxes that arise from the distribution of dividends are recognised when the liability
to pay the related dividends is recognised.
Current tax balances and deferred tax balances, and movements therein, are presented separately
from each other and are not offset. Current tax assets are offset against current tax liabilities, and
deferred tax assets against deferred tax liabilities, if the Company or the Group has the legally
enforceable right to set off current tax assets against current tax liabilities and the following additional
conditions are met:
–
in the case of current tax assets and liabilities, the Group intends either to settle on a net basis,
or to realise the asset and settle the liability simultaneously; or
–
in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the
same taxation authority on either:
–
the same taxable entity; or
–
different taxable entities, which, in each future period in which significant amounts of
deferred tax liabilities or assets are expected to be settled or recovered, intend to realise
the current tax assets and settle the current tax liabilities on a net basis or realise and
settle simultaneously.
(v) Provisions and contingent liabilities
Provisions are recognised for liabilities of uncertain timing or amount when the Group has a legal or
constructive obligation arising as a result of a past event, it is probable that an outflow of economic
benefits will be required to settle the obligation and a reliable estimate can be made. Where the time
value of money is material, provisions are stated at the present value of the expenditure expected to
settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot
be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of
outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed
by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent
liabilities unless the probability of outflow of economic benefits is remote.
(w) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Provided it is
probable that the economic benefits will flow to the Group and the revenue and costs, if applicable,
can be measured reliably, revenue is recognised in the consolidated income statement as follows:
(i)
Contract revenue
When the outcome of a construction contract can be estimated reliably, revenue from a
fixed price contract is recognised using the percentage of completion method, measured by
reference to the percentage of contract costs incurred to date to the estimated total contract
costs for the contract.
When the outcome of a construction contract cannot be estimated reliably, revenue is
recognised only to the extent of contract costs incurred that it is probable will be recoverable.