Page 159 - Mono Technology Public Company Limited : Annual Report 2014 EN

4.13 Provisions

Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

4.14 Income tax

Income tax represents the sum of corporate income tax currently payable and deferred tax.

Current tax

Current tax is provided in the accounts at the amount expected to be paid to the taxation authorities,
based on taxable profits determined in accordance with tax legislation.

Deferred tax

Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and
their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of
the reporting period.

The Company and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences
while they recognise deferred tax assets for all deductible temporary differences and tax losses carried
forward to the extent that it is probable that future taxable profit will be available against which such
deductible temporary differences and tax losses carried forward can be utilised.

At each reporting date, the Company and its subsidiaries review and reduce the carrying amount of
deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilised.

The Company and its subsidiaries record deferred tax directly to shareholders equity if the tax relates to
items that are recorded directly to shareholders equity.

5. Significant accounting judgements and estimates

The preparation of financial statements in conformity with financial reporting standards at times requires
management to make subjective judgements and estimates regarding matters that are inherently uncertain.

These judgements and estimates affect reported amounts and disclosures; and actual results could differ
from these estimates. Significant judgements and estimates are as follows:

Leases

In determining whether a lease is to be classified as an operating lease or finance lease, the management
is required to use judgement regarding whether significant risk and rewards of ownership of the leased
asset has been transferred, taking into consideration terms and conditions of the arrangement.

Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make judgement and
estimates based upon, among other things, past collection history, aging profile of outstanding debts
and the prevailing economic condition.

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