Annual Report 2011/12 - International Entertainment Corporation

Notes to the Consolidated Financial StatementsFor the year ended 31 March 20123. SIGNIFICANT ACCOUNTING POLICIES (Continued)Taxation (Continued)Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiariesand associates, except where the Group is able to control the reversal of the temporary difference and it is probablethat the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductibletemporary differences associated with such investments and interests are only recognised to the extent that it isprobable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences andthey are expected to reverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extentthat it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to berecovered.Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which theliability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantivelyenacted by the end of the reporting period.The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from themanner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of itsassets and liabilities.Current and deferred tax is recognised in profit or loss, except when it relates to items that are recognised in othercomprehensive income or directly in equity, in which case the current and deferred tax are also recognised in othercomprehensive income or directly in equity respectively.Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assetsthat necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost ofthose assets until such time as the assets are substantially ready for their intended use or sale. Investment incomeearned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deductedfrom the borrowing costs eligible for capitalisation.All other borrowings costs are recognised in profit or loss in the period in which they are incurred.Foreign currenciesIn preparing the financial statements of each individual group entity, transactions in currencies other than the functionalcurrency of that entity (foreign currencies) are recorded in the respective functional currency (i.e. the currency of theprimary economic environment in which the entity operates) at the rates of exchanges prevailing on the dates of thetransactions. At the end of the reporting period, monetary items denominated in foreign currencies are re-translated atthe rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currencyare not re-translated.46International Entertainment Corporation - Annual Report 2011/12