notes to the financial statements - Singapore Technologies ...

134 SIMPLY SMARTERNOTES TO THE FINANCIAL STATEMENTS31 December 2011(Currency - Singapore dollars unless otherwise stated)3. Summary of significant accounting policies (continued)(q)Income taxes (continued)(ii)Deferred taxDeferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the taxbases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is not recognised for temporarydifferences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neitheraccounting nor taxable profit or loss and taxable temporary differences arising on the initial recognition of goodwill. Deferred tax assetsand liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differencesare expected to be recovered or settled based on tax rates enacted or substantively enacted at the balance sheet date.Deferred tax liabilities are recognised for all taxable temporary differences associated with investments in subsidiaries, associates andjointly controlled entities, except where the timing of the reversal of the temporary differences can be controlled and it is probable thatthe temporary differences will not reverse in the foreseeable future.Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses,to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forwardof unused tax assets and unused tax losses can be utilised.At each balance sheet date, the Group re-assesses unrecognised deferred tax assets and the carrying amount of deferred tax assets.The Group recognises a previously unrecognised deferred tax asset to the extent that it has become probable that future taxable profitwill allow the deferred tax asset to be recovered. The Group conversely reduces the carrying amount of a deferred tax asset to theextent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred taxasset to be utilised.Deferred income tax relating to items recognised outside profit or loss is recognised in correlation to the underlying transaction eitherin other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwillon acquisition.Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current income taxassets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same tax authority.(r)Earnings per shareThe Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing theprofit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during theyear, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholdersand the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinaryshares, which comprise share plans granted to employees.(s)Operating segmentsFor management purposes, the Group is organised on a worldwide basis into four major operating segments. The management of the Companyreviewed the segments’ operating results regularly in order to allocate resources to the segments and to assess the segments’ performance.Additional disclosures on each of these operating segments are shown in Note 46, including the factors used to identify the reportable segmentsand the measurement basis of segment information.