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Notes to the Financial Statements
For the Financial Year Ended 31 December 2012
The Straits Trading Company Limited
ANNUAL REPORT 2012
57 /
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.2 CHANGES IN FINANCIAL REPORTING STANDARDS AND ACCOUNTING POLICIES (CONT’D)
The adoption of these standards did not have any effect on the financial performance or position of the Group and the
Company except as disclosed below:
Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets
The Amendments to FRS 12 apply to the measurement of deferred tax liabilities and assets arising from investment
properties measured using the fair value model under FRS 40 Investment Property, including investment property acquired
in a business combination and subsequently measured using the fair value model. For the purposes of measuring
deferred tax, the Amendments introduce a rebuttable presumption that the carrying amount of an investment property
measured at fair value will be recovered entirely through sale. The presumption can be rebutted if the investment
property is depreciable and is held within a business model whose objective is to consume substantially all of the
economic benefits over time, rather than through sale.
Upon adoption of the Amendments to FRS 12 by the Group and Company with effect from 1 January 2012, there is
a presumption that the carrying amount of an investment property measured at fair value will be recovered entirely
through sale. The change in accounting policy has been applied retrospectively and the effects are as follows:
31 December 2011
31 December 2010
As
previously
reported
Effect of
Amendments
to FRS 12 Restated
As
previously
reported
Effect of
Amendments
to FRS 12 Restated
$’000
$’000
$’000
$’000
$’000
$’000
Balance Sheets
Group
Deferred tax liabilities
76,957
(5,978)
70,979
75,868
(4,601)
71,267
Retained earnings
783,370
6,000
789,370
746,405
4,595
751,000
Other reserves
113,126
(22)
113,104
135,253
6
135,259
Company
Deferred tax liabilities
2,142
(1,217)
925
2,077
(1,143)
934
Retained earnings
172,528
1,239
173,767
108,890
1,137
110,027
Other reserves
(14,505)
(22)
(14,527)
13,248
6
13,254
The adoption of Amendments to FRS 12 resulted in $1.4 million reversal of deferred tax expenses in the income
statement for full year ended 31 December 2011.