Page 54 - Nanyang Technological University

NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.12 Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit or loss

except to the extent that it relates to items recognised directly in equity or in other comprehensive income, in
which case it is recognised in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
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.

2.13 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.

52 NTU ANNUAL REPORT 2016