NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
73
ANNUAL REPORT 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.25 EMPLOYEE BENEFITS
(a)
Defined contribution plan
The Group participates in the national pension schemes as defined by the laws of the countries in which it has
operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund
scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension
schemes are recognised as an expense in the period in which the related service is performed.
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they are accrued to the employees. The
estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period.
(c)
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date or whenever an
employee accepts voluntary redundancy in exchange for these benefits. Termination benefits are recognised when
commitment is demonstrated to either terminate the employment of current employees according to a detailed
plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of
termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more
than 12 months after the reporting date are discounted to present value.
2.26 LEASES
(a)
Where the group is the lessee
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item
are classified as operating leases. Operating lease payments (net of any incentives received from the lessor)
are recognised as an expense in profit or loss on a straight-line basis over the lease term. Contingent rents are
recognised as expenses in profit or loss in the periods in which they are incurred.
(b)
Where the group is the lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of the asset are
classified as operating leases.
Assets leased out under operating leases are included in property, plant and equipment, investment properties and
completed development properties for sale.
Rental income from operating leases (net of any incentives given to lessees) is recognised in profit or loss on a
straight-line basis over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised as an expense in profit or loss over the lease term on the same bases
as the rental income.
Contingent rents are recognised as income in profit or loss in the financial year in which they are earned.
