Vision - Alibaba

102 Annual Report 2007
Notes to the Financial Statements
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.11 Trade and other payables
Trade and other payables are recognized initially at fair value and subsequently measured at
amortized cost using the effective interest method unless the effect of discounting would be immaterial,
in which case they are stated at cost.
2.12 Deferred income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial
statements. However, the deferred income tax is not accounted for if it 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 profi t or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted at the balance sheet date
and are expected to apply when the related deferred income tax asset is realized or the deferred
income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profi t will
be available against which the temporary differences can be utilized.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries,
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.
2.13 Staff costs
(a) Short-term employee benefi ts
Salaries, annual bonuses, paid annual leave and the cost of non-monetary benefi ts are accrued
in the year in which the associated services are rendered by employees. Where payment or
settlement is deferred and the effect would be material, these amounts are stated at their present
value.
(b) Pension obligations
The Group participates in various defi ned contribution pension schemes. The schemes are
generally funded through payments to insurance companies, trustee-administered funds or the
relevant government authorities. A defi ned contribution plan is a pension plan under which the
Group pays fi xed contributions into a separate entity. The Group has no legal or constructive
obligations to pay further contributions if the fund does not hold suffi cient assets to pay all
employees the benefi ts relating to employee service in the current and prior periods.