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CORDLIFE GROUP LIMITED
| ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
2.17 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) 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 the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is
no longer probable that an outflow of economic resources will be required to settle the obligation, the
provision is reversed. If the effect of the time value of money is material, provisions are discounted using
a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognised as a finance cost.
2.18 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to
the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences
when the activities to prepare the asset for its intended use or sale are in progress and the expenditures
and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale. All other borrowing costs are expensed in the period they
occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds.
2.19 Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received
and all attaching conditions will be complied with. Where the grant relates, to an asset, the fair value is
recognised as deferred capital grant on the statement
s
of financial position and is amortised to profit
or loss over the expected useful life of the relevant asset by equal annual instalments.
Where loans or similar assistance are provided by governments or related institutions with an interest
rate below the current applicable market rate, the effect of this favourable interest is regarded as
additional government grant.
2.20 Employee benefits
(a)
Defined contribution plan
The Group participates in the national pension schemes as defined by the laws of the countries
in which it has operations. The Singapore companies in the Group make contributions to the
Central Provident Fund scheme in Singapore, a defined contribution pension scheme. The
Hong Kong company makes contributions to a defined contribution fund under the Mandatory
Provident Fund Schemes Ordinance, of which the assets are held separately in an independently
administered fund. These contributions are recognised as an expense in the period in which
the related service is performed.
