66
GDS Global Limited Annual Report 2015
NOTES TO
FINANCIAL STATEMENTS
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Deferred tax is recognised on the differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
Deferred tax liabilities are recognised on taxable temporary differences arising on investments in
subsidiaries, except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred
tax assets arising from deductible temporary differences associated with such investments are
only recognised to the extent that it is probable that there will be sufficient taxable profits against
which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
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 profits will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability
is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from 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.
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 they relate to income taxes levied by the
same taxation authority and the Group intends to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when
they relate to items credited or debited outside profit or loss (either in other comprehensive
income or directly in equity), in which case the tax is also recognised outside profit or loss (either in
other comprehensive income or directly in equity, respectively), or where they arise from the initial
accounting for a business combination. In the case of a business combination, the tax effect is
taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the
net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.
FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - The individual financial statements
of each entity within the Group are measured and presented in the currency of the primary
economic environment in which the entity operates (its functional currency). The consolidated
financial statements of the Group and the statement of financial position of the Company
are presented in Singapore dollars, which is the functional currency of the Company and the
presentation currency for the consolidated financial statements.
