Material Accounting Policies
Basis of Preparation and presentation
The financial statements have been prepared on the historical cost basis except for certain
items which are measured at fair value at the end of each reporting period, as explained in the
accounting policies given below.
Historical cost is generally based on the fair value of the consideration given in exchange for
goods and services.
Fair Value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date, regardless
of whether that price is directly observable or estimated using another valuation technique.
In estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these financial statements is determined on such
a basis, and measurements that have some similarities to fair value but are not fair value, such
as net realisable value in Ind AS 2 or value in use in Ind AS 36.
The preparation of financial statements in conformity with Ind AS requires management to
make judgements, estimates and assumptions that affect the application of the accounting
policies and the reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the year. Actual results could differ from those estimates. The estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects
only that period; they are recognised in the period of the revision and future periods if the
revision affects both current and future periods.
The directors have, at the time of approving the financial statements, a reasonable expectation
that the Company have adequate resources to continue in operational existence for the
foreseeable future. Thus, they continue to adopt the going concern basis of accounting in
preparing the financial statements.
Recent Accounting Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
MCA has notified amendments to Ind AS 1 - Presentation of Financial Statements (classification
of liabilities as current or non current, including liabilities with covenants), Ind AS 12 - Income
Taxes (International Tax Reform - Pillar Two Model Rules), Ind AS21- The Effects of Changes
in Foreign Exchange Rates (Lack of Exchangeability), and Ind AS 7 - Statement of Casn|i
Flows and Ind AS 107 - Financial Instruments: Disclosures (Supplier Finance Arrangements),
effective from 1st April 2025. The Company has reviewed these amendments and based on
its evaluation, has determined that they do not have any impact on the Company's financial
statements. However, pursuant to the adoption of the amendments to Ind AS 7 and Ind AS
107, the Company has provided the required disclosures relating to liabilities under supplier
finance arrangements in the notes to the financial statements.
Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company's
normal operating cycle and other criteria set out in the Schedule III to the Companies Act,
2013 and Ind AS 1. The Company has ascertained its operating cycle as twelve months for the
purpose of current and non-current classification of assets and liabilities.
Property, Plant and Equipment
(i) Tangible Assets (Other than Bearer Plants)
Property, Plant and Equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. Cost includes deemed cost as at 1st January, 2015 measured
as per the previous GAAP, which includes Standards notified under the Companies (Accounting
Standards) Rules, 2006. Cost is inclusive of incidental expenses related to acquisition. Borrowing
costs attributable to the construction or production of qualifying assets are capitalised.
Expenses for the repair of Property, Plant and Equipment are charged against income when
incurred.
Land (including certain lease hold tea estate land), carried at historical cost, is not depreciated.
Fine art and sculptures are measured at historical cost as fair value cannot be reliably
measured.
Properties in the course of construction for production, supply or administrative purposes are
carried at cost, less any recognised impairment loss. Depreciation of these assets, are on the
same basis as other property assets, and commences when the assets are ready for their
intended use.
An item of Property, Plant and Equipment is derecognised upon disposal or when no future
economic benefits are expected to arise from the continued use of asset. Any gain or loss
arising on the disposal or retirement of an item of property, plant and equipment is determined
as the difference between the sales proceeds and the carrying amount of the asset and is
recognised in profit or loss.
Items of Property, Plant and Equipment are depreciated in a manner that amortises the cost
of the assets less its residual value, over their useful lives on a straight line basis. Estimated
useful lives of the assets are as follows-
Buildings 30-60 years
Plant and equipment 5-20 years
Furniture and fixtures 10 years
Vehicles 6-8 years
The above estimated useful lives are also as specified in Schedule II of the Companies Act,
2013. Renewal of estate land leases is assumed, consistent with past practice and considered
life in perpetuity.
The estimated useful lives, residual values and depreciation method are reviewed at the end
of each reporting period, and the effect of any changes in estimate is accounted for on a
prospective basis.
(ii) Bearer Plants
Bearer plants comprising of mature tea bushes and shade trees are stated at cost less
accumulated depreciation and accumulated impairment losses. Cost includes deemed cost as
at 1st January, 2015. The Company recognised bearer plants for the first time at fair value as
of 1st January, 2015 (transition date to Ind AS) and used such fair value as deemed cost.
Immature bearer plants, including the cost incurred for procurement of new seeds and
maintenance of nurseries, are carried at cost less any recognised impairment losses under
capital work-in-progress. Cost includes the cost of land preparation, new planting and
maintenance of newly planted bushes until maturity. On maturity, these costs are classified
under bearer plants. Depreciation of bearer plants commence on maturity.
Costs incurred for infilling including block infilling are generally recognised in the Statement of
Profit and Loss unless there is a significant increase in the yield of the sections, in which case
such costs are capitalised and depreciated over the remaining useful life of the respective
sections.
Depreciation on bearer plants is recognised so as to write off its cost over useful lives, using
the straight-line method. The estimated useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with the effect of any change in estimate
accounted for on a prospective basis.
Estimated useful lives of matured bearer plants has been determined to be 46 years. Immature
Bearer plants are tested for impairment/obsolescence. Bearer plants attain commercial
harvestable stage in about 3 to 4 years.
Intangible Assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortisation and accumulated impairment losses. Amortisation is recognised on
a straight line basis over the estimated useful lives. The estimated useful life and amortisation
method are reviewed at the end of each reporting period, with the effect of any changes in
estimate being accounted for prospective basis. Intangible assets with indefinite useful lives
that are acquired separately are carried at cost less impairment losses.
Cost includes deemed cost as at 1st January, 2015 measured as per the previous GAAP, which
includes Standards notified under the Companies (Accounting Standards) Rules, 2006.
The useful life of an intangible asset is considered finite where the rights to such assets are
limited to a specified period of time by contract or law (e.g., patents, licences, trademarks,
franchise and servicing rights) or the likelihood of technical, technological obsolescence (e.g.,
computer software, design, prototypes) or commercial obsolescence (e.g., lesser known brands
are those to which adequate marketing support may not be provided). If, there are no such
limitations, the useful life is taken to be indefinite.
Intangible assets of the Company with finite useful lives comprise acquired computer software.
Cost of software is capitalised where it is expected to provide future enduring economic benefits.
Capitalisation costs include licence fees and cost of implementation / system integration
services. The costs are capitalised in the year in which the relevant software is implemented for
use and is amortised across a period not exceeding 5 years. Expenses incurred on upgradation
/ enhancements is charged off as revenue expenditure unless they bring similar significant
additional benefits.
Indefinite life intangibles mainly consist of brands/trademarks. The assessment of indefinite
life is reviewed annually to determine whether the indefinite life continues, if not, it is impaired
or changed prospectively basis revised estimates.
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, which is measured
at acquisition date fair value, and the amount of any non-controlling interests in the acquiree.
Acquisition-related costs are generally recognised in statement of profit and loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are
recognised at their respective fair values. Goodwill is measured as the excess of the sum of
the consideration transferred over the net of the acquisition-date amounts of the identifiable
assets acquired and the liabilities assumed.
Goodwill
Goodwill arising on acquisition of a business is carried at cost as established at the date of
acquisition of the business (see note E above) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Company's cash¬
generating units (or groups of cash-generating units) that is expected to benefit from the
synergies of the combination. A cash-generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying
amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata based on the carrying
amount of each asset in the unit. Any impairment loss for goodwill is recognised directly
in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent
periods. On disposal of the relevant cash-generating unit, the attributable amount of goodwill
is included in the determination of the profit or loss on disposal.
Research and Development
Research and Development expenditure of revenue nature is written off in the Statement of
Profit and Loss as incurred. Such expenditure is capitalised as intangible assets only if it meets
the criteria of an intangible asset. Internally-generated intangible assets are reported at cost
less accumulated amortisation and accumulated impairment losses.
Impairment of Assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible
(including bearer plants) and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
An impairment loss is recognised for the amount by which the carrying amount of the asset
exceeds its recoverable amount, which is the higher of an asset's net selling price and its value
in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not
been adjusted.
If impairment is no longer justified in future periods due to a recovery in assets' fair value or
value in use, the impairment reserve is reversed.
Biological Assets and Agricultural Produce
(i) Biological Assets
Biological assets of the Company comprise of unharvested green tea leaves that are classified
as current biological assets and livestock classified as non-current biological assets. The
Company recognises biological assets when, and only when, the Company controls the assets
as a result of past events, it is probable that future economic benefits associated with such
assets will flow to the Company and the fair value or cost of the assets can be measured
reliably. Expenditure incurred on biological assets are measured on initial recognition and at
the end of each reporting period at its fair value less costs to sell. The gain or loss arising from
a change in fair value less costs to sell of biological assets are included in Statement of Profit
and Loss for the period in which it arises.
The animals reared from conception (calf) and heifers are classified as "immature biological
assets" until the animals become productive. All the productive animals are classified as
"matured biological assets".
(ii) Agricultural Produce
The Company recognises agricultural produce when, and only when, the Company controls the
assets as a result of past events, it is probable that future economic benefits associated with
such assets will flow to the Company and the fair value or cost of the assets can be measured
reliably. Agricultural produce harvested from the Company's biological assets are valued at
fair value less cost to sell at the point of harvest. A gain or loss arising on initial recognition of
agricultural produce at fair value less costs to sell shall be included in Statement of Profit and q
Loss for the period in which it arises.
The Company's agricultural produce comprises of green leaves plucked from its tea estates.
Inventories
Inventories are stated at the lower of cost and net realisable value. Finished goods produced
from agricultural produce are valued at lower of cost arrived at by adding the cost of conversion
to the fair value of agricultural produce and the net realisable value. Net realisable value
represents the estimated selling price for inventories less all selling costs.
Provision is made for obsolete, slow moving and defective inventories, whenever necessary.
Foreign Currency Transactions
The presentation currency of the Company is Indian Rupees (Rs). Transactions in foreign
currency are accounted for at the exchange rate prevailing on the transaction date. Monetary
transactions remaining unsettled are translated at the rate of exchange ruling at the end of the
year. Exchange gain or loss arising on settlement/translation is recognised in the Statement of
Profit and Loss.
Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to
the contractual provisions of the relevant instrument and are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issues of financial assets
and financial liabilities (other than financial assets and financial liabilities measured at fair
value through profit or loss) are added to or deducted from the fair value measured on initial
recognition of financial assets or financial liabilities. Purchase or sale of financial assets that
require delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date when the
Company commits to purchase or sell the asset.
Financial Assets
Recognition and Classification
The financial assets are classified at initial recognition in the following measurement categories
as:
• those subsequently measured at amortised cost
• those to be subsequently measured at fair value [either through other comprehensive
income (OCI), or through profit or loss]
However, trade receivables that do not contain a significant financing component are
measured at transaction price.
Subsequent Measurement
- Financial assets measured at amortised cost - Financial assets which are held within
the business model of collection of contractual cash flows and where those cash flows
represent payments solely towards principal and interest on the principal amount
outstanding are measured at amortised cost. A gain or loss on a financial asset that is
measured at amortised cost and is not a part of hedging relationship is recognised in
profit or loss when the asset is derecognised or impaired.
- Financial assets measured at fair value through other comprehensive income - Financial
assets that are held within a business model of collection of contractual cash flows
and for selling and where the assets' cash flow represents solely payment of principal
and interest on the principal amount outstanding are measured at fair value through
OCI. Movements in carrying amount are taken through OCI, except for recognition of
impairment gains or losses. When a financial asset, other than investment in equity
instrument, is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to Statement of Profit and Loss.
Classification of equity instruments, not being investments in subsidiaries, associates and
joint arrangements, depend on whether the Company has made an irrevocable election
at the time of initial recognition to account for the equity investment at fair value through |
OCI. When investment in such equity instrument is derecognised, the cumulative gains or
losses recognised in OCI is transferred within equity on such derecognition.
- Financial assets measured at fair value through profit or loss - Financial assets are
measured at fair value through profit or loss unless it is measured at amortised cost or at
fair value through other comprehensive income on initial recognition. Movements in fair
value of these instruments are taken in profit or loss. However, trade receivables that do
not contain a significant financial component are measured at transaction price.
Impairment of financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group
of financial assets is impaired. Impairment losses are recognised in the profit or loss where
there is objective evidence of impairment based on reasonable and supportable information
that is available without undue cost or effort. For all financial assets, expected credit losses
are measured at an amount equal to the 12 month expected credit losses or at an amount
equal to the life time expected credit losses (ECL) if the credit risk on the financial asset has
increased significantly since initial recognition.
The Company always recognises lifetime ECL for trade receivables and lease receivables. The
expected credit losses on these financial assets are estimated using a provision matrix based
on the Company's historical credit loss experience, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including time value of money where
appropriate.
For all other financial instruments, the Company recognises lifetime ECL when there has been
a significant increase in credit risk since initial recognition. However, if the credit risk on the
financial instrument has not increased significantly since initial recognition, the Company
measures the loss allowance for that financial instrument at an amount equal to 12-month
ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default
events over the expected life of a financial instrument. In contrast, 12-month ECL represents the
portion of lifetime ECL that is expected to result from default events on a financial instrument
that are possible within 12 months after the reporting date.
a. Definition of Default
The Company considers the following as constituting an event of default for internal
credit risk management purposes as historical experience indicates that financial assets
that meet either of the following criteria are generally not recoverable:
• when there is a breach of financial covenants by the debtor; or
• information developed internally or obtained from external sources indicates that
the debtor is unlikely to pay its creditors, including the Company, (in full).
b. Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental
impact on the estimated future cash flows of that financial asset have occurred. Evidence
that a financial asset is credit-impaired includes observable data about the following
events:
i) significant financial difficulty of the issuer or the borrower;
ii) a breach of contract, such as a default or past due event (see (a) above);
iii) the lender(s) of the borrower, for economic or contractual reasons relating to the
borrower's financial difficulty, having granted to the borrower a concession(s) that
the lender(s) would not otherwise consider;
iv) it is becoming probable that the borrower will enter bankruptcy or other financial
reorganisation; or
v) the disappearance of an active market for that financial asset because of financial
difficulties.
c. Write-off policy
The Company writes off a financial asset when there is information indicating that the/J
debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has entered into bankruptcy
proceedings, or in the case of trade receivables, when the amounts are over two years
past due, whichever occurs sooner. Financial assets written off may still be subject to
enforcement activities under the Company's recovery procedures, taking into account
legal advice where appropriate. Any recoveries made are recognised in profit or loss.
d. Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default,
loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at
default. The assessment of the probability of default and loss given default is based on
historical data adjusted by forward-looking information as described above.
Income recognition on financial assets
Interest income from financial assets is recognised in profit or loss using effective interest
rate method, where applicable. Dividend income is recognised in profit or loss only when
the Company's right to receive payments is established and the amount of dividend can be
measured reliably.
Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements
entered into. Financial liabilities are classified, at initial recognition, as subsequently measured
at amortised cost unless they fulfill the requirement of measurement at fair value through
profit or loss. Where the financial liability has been measured at amortised cost, the difference
between the initial carrying amount of the financial liabilities and their redemption value is
recognised in the Statement of Profit and Loss over the contractual terms using the effective
interest rate method. Financial liabilities at fair value through profit or loss are carried at
fair value with changes in fair value recognised in the finance income or finance cost in the
Statement of Profit and Loss.
) Derecognition of financial assets and financial liabilities
Financial assets are derecognised when the rights to receive benefits have expired or been
transferred, and the Company has transferred substantially all risks and rewards of ownership
of such financial asset. Financial liabilities are derecognised when the liability is extinguished,
that is when the contractual obligation is discharged, cancelled or expires.
) Offsettingoffinancialinstruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet
where there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
Revenue from sale of products
The Company recognises revenue from sale of goods when the Company perform its obligations
to its customers and, the amount of revenue can be reliably measured and it is probable that
future economic benefits will flow to the entity and the costs incurred or to be incurred in
respect of the transaction can be measured reliably.
The timing of such recognition in case of goods is when the control over the same is transferred
to the customer, which is mainly upon delivery.
The transaction price of goods sold is net of returns and variable consideration on account
of various discounts offered by the Company as applicable. It excludes amounts collected on
behalf of third parties, such as Goods and Services Tax.
Government Grant
Government grants are recognised at their fair value where there is a reasonable assurance
that the grant will be received and the Company will comply with all attached conditions.
Government grants are recognised in the Statement of Profit and Loss on a systematic basis
over the periods in which the Company recognises the related costs for which the grants are
intended to compensate. Government grants whose primary condition is that the Company
should purchase, construct or otherwise acquire non - current assets are recognised as
deferred revenue in the Balance Sheet and transferred to the profit or loss on a systematic
and rational basis over the useful lives of the related assets.
Employee Benefits
The Company operates defined contribution schemes like Provident Fund and defined
Contribution Pension Schemes. The Company makes regular contribution to provident funds
which are fully funded and administered by Government and are independent of Company's
finance. Contributions are recognised in Statement of Profit and Loss on an accrual basis.
The Company operates a non-contributory defined contribution pension scheme for certain
employees. The Company contributes 15% of the employees' current salary to the above
contribution fund which is recognised in the Statement of Profit and Loss.
The Company also operates defined benefit Provident Fund Schemes for certain employees
which are fully funded and administered by trustees and are independent of the Company's
finance. The Company makes regular contributions to the fund and shortfall if any, determined
by annual actuarial valuation, is recognised in the Statement of Profit and Loss.
Defined Benefit Gratuity Plan is maintained by the company for all its eligible employees.
The Company also operates a Non Contributory Defined Benefit Pension Scheme for certain
employees. The Company contributes to such funds on the basis of actuarial valuation at the
end of each year after setting off any net asset in respect of either fund. Both the Pension
Fund and gratuity fund are administered by the Trustees and is independent of the Company's
finance.
For Schemes where recognised funds have been set up annual contributions determined
as payable in the actuarial valuation report are contributed. Gain or Loss on account of
remeasurements are recognised immediately through Other Comprehensive Income in the
period in which they occur.
Post-retirement medical benefits are provided by the Company for certain category of
employees. Liability is determined through independent year end actuarial valuation and
recognised in the Statement of Profit and Loss. Provision is made for leave encashment benefit
payable to employees on the basis of independent actuarial valuation, at the end of each year
and charge is recognised in the Statement of Profit and Loss.
Leases
As a lessee
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the
date the underlying asset is available for use). Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Unless the Company is reasonably certain to obtain
ownership of the leased asset at the end of the lease term, the recognised right-of-use assets
are depreciated on a straight-line basis over the shorter of its estimated useful life and the
lease term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured
at the present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Company and payments
of penalties for terminating a lease, if the lease term reflects the Company exercising the
option to terminate. The variable lease payments that do not depend on an index or a rate are
recognised as expense in the period on which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Company uses the incremental
borrowing rate at the lease commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the in-substance fixed lease payments or a change in
the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e.,
those leases that have a lease term of 12 months or less from the commencement date and
do not contain a purchase option). Lease payments on short-term leases and leases of low-
value assets are recognised as expense (under 'Rent' in note 29) on a straight-line basis over
the lease term.
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in the
Statement of Profit and Loss on a straight- line basis over the lease term unless the receipts are
structured to increase in line with expected general inflation to compensate for the expected
inflationary cost increases.
Taxes on Income
Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement
of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the
period using tax rates and tax laws enacted during the period, together with any adjustment
to tax payable in respect of previous years.
A provision is recognised for those matters for which the tax determination is uncertain but
it is considered probable that there will be a future outflow of funds to a tax authority. The
provisions are measured at the best estimate of the amount expected to become payable. The
assessment is based on the judgement of tax professionals within the Company supported
by previous experience in respect of such activities and in certain cases based on specialist
independent tax advice.
Deferred tax is recognised on temporary differences between the carrying amounts of assets
and liabilities and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred
tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition (other than in a business combination
or for transactions that give rise to equal taxable and deductible temporary differences) of
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit. In addition, a deferred tax liability is not recognised if the temporary difference arises
from the initial recognition of goodwill.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply
in the period in which the liability is settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period.
Current and deferred tax are recognised in profit or loss, except when they relate to items that
are recognised in other comprehensive income or directly in equity, in which case, the current
and deferred tax are also recognised in other comprehensive income or directly in equity
respectively.
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