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AFRICAN DAWN Annual Report 2016

Accounting Policies continued Temporary differences are differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective taxation bases. The amount of deferred taxation provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, and is measured at the taxation rates (enacted or substantively enacted at the reporting date) that are expected to be applied to the temporary differences when they reverse. Deferred taxation is recognised in profit or loss for the period, except to the extent that it relates to a transaction that is recognised directly in equity or in other comprehensive income, or a business combination that is accounted for as an acquisition. The effect on deferred taxation of any changes in taxation rates is recognised in profit or loss for the period, except to the extent that it relates to items previously charged or credited directly to equity. Deferred taxation liabilities are generally recognised for all taxable temporary differences, and deferred taxation 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. Deferred taxation assets are recognised to the extent that it is probable that future taxable income will be available against which the unutilised taxation losses and deductible temporary differences can be used. Deferred taxation assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxation benefits will be realised. Deferred taxation assets and liabilities are offset if there is a legally enforceable right to offset current taxation liabilities against current taxation assets, and they relate to income taxes levied by the same taxation authority on the same taxable entity, or on different taxation entities, but they intend to settle current tax liabilities and assets on a net basis or their taxation assets and liabilities will be realised simultaneously. Deferred taxation assets and liabilities are not discounted. 1.10 Property, plant and equipment Property, plant and equipment is carried at historical cost less accumulated depreciation and any accumulated impairment losses. All other repairs and maintenance expenses are recognised in profit or loss when they are incurred. Depreciation is recognised so as to write off the cost of assets over their estimated useful lives, to their residual values. The straight-line method is used and the estimated useful lives are as follows: Property, plant and equipment Item Depreciation method Average useful life Furniture and fixtures Straight line 4 - 6 years IT equipment Straight line 3 - 5 years Leasehold improvements Straight line Length of leases Motor vehicles Straight line 5 years Office equipment Straight line 3 - 5 years Telephone equipment Straight line 5 years Leased assets are depreciated at the shorter of the useful life or the period of the lease. The depreciation method, residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. If the recoverable amount is less than the carrying amount then the carrying amount is impaired in line with policy 1.13. Any gain or loss on disposals is determined by comparing the disposal proceeds with the carrying amount of the asset and is recognised in profit or loss. AFRICAN DAWN ANNUAL REPORT 2016 41


AFRICAN DAWN Annual Report 2016
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