57
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.13 Revenue (cont’d)
(iii) Commissions
When the Group acts in the capacity of an agent rather than as the principal in
a transaction, the revenue recognised is the net amount of commission made by
the Group.
3.14 Government grants
Government grants are recognised initially as deferred income at fair value when there
is reasonable assurance that they will be received and the Group will comply with the
conditions associated with the grant. These grants are then recognised in profit or loss
as ‘other income’ on a systematic basis over the useful life of the asset. Grants that
compensate the Group for expenses incurred are recognised in profit or loss as ‘other
income’ on a systematic basis in the same periods inwhich the expenses are recognised.
3.15 Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-
line basis over the term of the lease. Lease incentives received are recognised as an
integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the
finance expense and the reduction of the outstanding liability. The finance expense is
allocated to each period during the lease term so as to produce a constant periodic rate
of interest on the remaining balance of the liability.
Contingent lease payments are accounted for by revising the minimum lease payments
over the remaining term of the lease when the lease adjustment is confirmed.
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.16 Finance income and finance costs
Finance income comprises interest income on funds invested. Interest income is
recognised as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings. Borrowing costs that are not
directly attributable to the acquisition, construction or production of a qualifying asset
are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses on financial assets and financial liabilities are reported
on a net basis as either finance income or finance cost depending on whether foreign
currency movements are in a net gain or net loss position.
3.17 Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax is
recognised in profit or loss except to the extent that it relates to a business combination,
or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for
the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
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:
•
temporary differences on 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;
•
temporary differences related to investments in subsidiaries and associates to the
extent that the Group is able to control the timing of the reversal of the temporary
difference and it is probable that theywill not reverse in the foreseeable future; and
