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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
154
Tiger Brands Limited Integrated Annual Report
2014
Sale of goods
Turnover from the sale of goods is recognised when
the significant risks and rewards of ownership have
passed to the buyer, usually on dispatch of the
goods.
Dividend income
Dividend income is recognised when the group’s
right to receive payment is established. Non-resident
shareholders’ taxation is provided in respect of
foreign dividends receivable, where applicable.
Interest received
For all financial instruments measured at amortised
cost, interest received or expensed is recorded using
the effective interest rate, which is the rate that
exactly discounts the estimated future cash payments
or receipts through the expected life of the financial
instrument or a shorter period, where appropriate,
to the net carrying amount of the financial asset
or liability. Interest received is included in finance
income in the income statement.
Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised
as part of the cost of the respective assets. All other
borrowing costs are expensed in the period they
occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds.
The group capitalises borrowing costs for all
qualifying assets where construction was commenced
on or after 1 October 2009.
Taxation
The income tax expense represents the sum of current
tax payable (both current and deferred).
Normal tax – current
The normal tax is based on taxable profit for the
year. Taxable profit differs from profit as reported in
the income statement because it excludes items of
income or expense that are taxable or deductible in
other years, and it further excludes items that are
never taxable or deductible. Normal tax may include
under or overprovisions relating to prior year
taxation. The group’s liability for normal tax is
calculated using tax rates that have been enacted
or substantively enacted by the reporting date.
Normal tax relating to items recognised outside profit
or loss is recognised outside profit or loss. Normal
tax items are recognised in correlation to the
underlying transaction either in other comprehensive
income or directly in equity.
Normal tax – deferred
Deferred tax is calculated on the liability method,
using the difference between the carrying amounts
of assets and liabilities and their corresponding tax
base used in the computation of taxable profit.
Deferred tax liabilities are recognised for taxable
temporary differences except:
Ϣ
Ϣ
where the liability arises from the initial
recognition of goodwill or an asset or liability in
a transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss;
and
Ϣ
Ϣ
in respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, where
the timing of the reversal of the temporary
differences can be controlled, and it is probable
that the temporary differences will not reverse in
the foreseeable future.
Deferred tax assets are recognised for all deductible
temporary differences, carry forward of unused tax