Page 135 - Mono Technology Public Company Limited : Annual Report 2013

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

Current tax
Current income 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 income 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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