FORGING AHEAD - Tradewinds Plantation Berhad

4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.14 Income taxes (continued)
(b) Deferred tax
Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying
amount of an asset or liability in the statement of financial position and its tax base.
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial
recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction,
affects neither accounting profit nor taxable profit.
A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The
carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable
that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be
realised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable
that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred income taxes relate to the same taxation authority on either:
(i) the same taxable entity; or
FINANCIAL STATEMENTS
(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts
of deferred tax liabilities or assets are expected to be settled or recovered.
Deferred tax will be recognised as income or expense and included in profit or loss for the period unless the tax
relates to items that are credited or charged, in the same or a different period, directly to equity, in which case
the deferred tax will be charged or credited directly to equity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively
enacted by the end of the reporting period.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010
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