2.
Significant accounting policies (continued)
2.10 Income taxes (continued)
(b)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the end of the reporting period
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except where the deferred tax liability arises
from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credit
and unused tax loss, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credit and unused tax loss can be utilised except where
the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset
or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and
are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset
to be recovered.
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 at the end of each reporting period.
Deferred taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises from a
business combination or a transaction which is recognised directly in equity. Deferred tax on temporary differences
arising from fair value gains and losses on available-for-sale financial assets are charged or credited directly to equity
in the same period the temporary differences arise.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income
tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.
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ASCENDAS india trust ANNUAL REPORT
2015/2016
