Page 52 - Nanyang Technological University

NOTES TO
FINANCIAL STATEMENTS (CONT’D)

31 March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.11 Income tax (cont’d)

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable income and expenditure;
temporary differences related to investments in subsidiaries and jointly controlled entities to the extent
that it is probable that they will not reverse in the foreseeable future; and taxable temporary differences
arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting
date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can be
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.

2.12 Income recognition

Student fees

Income from tuition and other fees are recognised in the period in which the services are rendered.

Management fees

Management fees are recognised upon services rendered.

50 NTU ANNUAL REPORT 2015