Notes to the financial statements
Year ended 31 March 2016
3 Significant accounting policies (continued)
(i)
Taxation (continued)
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for:
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit; and
•
temporary differences relating to investments in subsidiaries to the extent that the Group is able to control
the timing of the reversal of the temporary differences and it is probable that they will not reverse in the
foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the
Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities. For investment properties that are measured at fair value in Singapore and Australia, the presumption
that the carrying amounts will be recovered through sale has not been rebutted. This presumption is rebutted for
investment properties in the PRC held within a business model whose business objective is to consume substantially
all of the economic benefits embodied in the investment properties over time. Deferred tax is measured at the tax
rates that are expected to be applied to temporary differences when they reverse, based on the laws that have
been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the unused tax losses and credits can be utilised. Deferred tax assets are reviewed at each reporting
date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain
tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax
liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations
of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series
of judgements about future events. New information may become available that causes the Group to change its
judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense
in the period that such a determination is made.
The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the taxation of the Trust for income
earned and expenditure incurred after its public listing on SGX-ST. Subject to meeting the terms and conditions
of the tax ruling, the Trustee will not be assessed to tax on the taxable income of the Trust distributed in the same
financial year. Instead, the Trustee and the Manager will deduct income tax (if required) at the prevailing corporate
tax rate of 17.0% from the distributions made to Unitholders that are made out of the taxable income of the Trust
in that financial year.
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A-REIT ANNUAL REPORT
2015/2016
