Annual Report 2012 - ecoWise Holdings Limited

66ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Income Tax (Continued)A deferred tax asset or liability is recognised for all temporary differences, unless the temporary differencesarise from the initial recognition of an asset or liability in a transaction that (i) is not a business combinationand (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferredtax liability or asset is recognised for all temporary differences associated with investments in subsidiaries andassociates, except where the Group is able to control the timing of the reversal of the temporary differencesand it is probable that the temporary differences will not reverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at the end of each reporting year and is reduced, ifnecessary, by the amount of any tax benefits based on available evidence, are not expected to be realised.Borrowing CostsBorrowing costs comprise interest expenses on borrowings and unwinding of the discount on provisionsand contingent consideration that are recognised in the profit or loss.Borrowing costs that are interest expenses and other costs incurred in connection with the borrowing offunds that are directly attributable to the acquisition, construction or production of a qualifying asset thatnecessarily take a substantial period of time to get ready for their intended use or sale are capitalised aspart of the cost of that asset until substantially all the activities necessary to prepare the qualifying asset forits intended use or sale are completed.Other borrowing costs are recognised as an expense in the period in which they are incurred.Interest expenses are calculated using the effective interest method.