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Provision are recognized when the Company has a present obligation (legal or constructive)
As a result of a past event ,it is probable that an outflow of resource embodying economic
Benefits will be acquired to settle the obligation and a reliable estimate can be made of the amount of
obligation. If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessment of the time
value of money, and where appropriate ,the risks specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is recognized as an interest expense but classified as
additional provisions.
In prior years, provisions for contingencies were accrued when it is probable that a liability had been
incurred at balance sheet date and amount can be reasonably estimated. Otherwise, the loss
contingency was disclosed.
Lease
Operating lease payments are recognized as expense in the statement of income based on the
terms of the lease agreement.
Revenue
Revenue is recognized to the extent that s probable that the economic benefits associated with
the transaction will flow to the company and the amount of revenue can be reliably measured. The
following specific recognition criteria must be met before revenue is recognized.
Borrowing Costs
Borrowing costs are generally expensed as incurred. Borrowing costs are capitalized if they are
directly attributable to the acquisition or construction of a qualifying asset. Capitalization of borrowing
costs commences when the activities to prepare the asset are in progress and expenditures and
borrowing costs are being incurred. Borrowing costs are capitalized until assets are substantially ready
for their intended use. If the carrying amount of the asset exceeds its recoverable amount, an
impairment loss is recorded.
For income tax purposes, borrowing costs are treated as deductible expenses in the year such were
incurred.
Income Tax
Deferred income tax is provided using the liability method. Deferred tax assets and liability are
recognized for the future tax consequences attributable to temporary differences between the financial
reporting bases of assets and liabilities and their related tax bases. Deferred tax assets and liabilities are
measured using the tax rate expected to apply to the taxable income in the years in which those
temporary differences are expected to be recovered or settled.