Building Lifelong Relationships - NUSS

NUSS
ANNUAl RepoRt 2006
PG
74
Notes to the financial statements
2 Summary of significant accounting policies (cont’d)
Provisions
Provisions are recognised when the Society has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Employee benefits
(i) Defined contribution plan
As required by law, the Society makes contribution to the Central Provident Fund (“CPF”). CPF contribution is
recognised as compensations expense in the same period as the employment that gives rise to the contribution.
(ii) Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for the
unconsumed leave as a result of services rendered by employees up to the balance sheet date.
Impairment of assets
The carrying amounts of the assets subject to impairment are reviewed at each balance sheet date to determine whether
there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Recoverable
amount is defined as the higher of value in use and net selling price.
Income recognition
Income is recognised when the significant risks and rewards of ownership have been transferred to the members and the
amount of income and the costs of the transaction can be measured reliably. Income excludes goods and services taxes
and is arrived at after deduction of trade discounts. No income is recognised if there are significant uncertainties regarding
recovery of the consideration due, associated costs or the possible return of subscription fees.
Income from subscriptions and interest on fixed and term deposits are accounted for on a time-apportioned basis.
Income earned from fruit machines are recognised when monies are collected.
The entrance fee is recognised in full in the year in which new members are admitted.
Financial instruments
Financial instruments carried on the balance sheet include cash and cash equivalents, financial assets and financial liabilities.
The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.
Disclosures on the Society’s financial risk management objectives and policies are provided in Note 18.