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112 Annual Report 2012
Effective for the periods beginning on or after 1 January 2014
TFRIC 4 Determining whether an Arrangement contains a Lease
TFRIC 12 Service Concession Arrangements
TFRIC 13 Customer Loyalty Programmes
TSIC 29 Service Concession Arrangements: Disclosure
The Group’s management has determined that these new accounting standards, new financial reporting standards, new
interpretation and amendments to accounting standards and financial reporting standards will not have a significant impact on the
financial statements being presented, except for the significant accounting standards that have an impact as follows:
• TAS 8 The standard requires a ‘management approach’, under which segment information is presented on the
same basis as that used for internal reporting purposes. The Group will apply this standard from 1 January 2013.
The expected impact is still being assessed in detail by management, but it appears likely that the number of
reportable segments, as well as the manner in which the segments are reported, will change in a manner that is
consistent with the internal reporting provided to the Chief Operating Decision-Maker.
• TAS 12 deals only with taxes on income, comprising current and deferred tax. Current tax expense for a period is
based on the taxable and deductible amounts that will be shown on the tax return for the current year. Current
tax assets and liabilities for the current and prior periods are measured at the amount expected to be paid
to (recovered from) the taxation authorities, using the tax rates and tax laws that have been enacted or
substantively enacted by the statement of financial position date. Deferred tax accounting is based on the
temporary differences between the tax base of an asset or liability and its carrying amount in the financial
statements.
2.3 Investment in subsidiaries, jointly-controlled entity and associates
2.3.1 Subsidiaries
Subsidiaries are all the entities over which the SET has the power to govern the financial and operating policies.
Subsidiaries are consolidated from the date on which control is transferred to the SET and are no longer consolidated from the date on
which that control ceases.
All related party transactions, balances and unrealised gains and losses on transactions between the SET and its
subsidiaries have been eliminated.
In the SET’s financial statements, investments in subsidiaries are accounted for using the cost method. Under the
cost method, income from investments in subsidiaries will be recorded when dividends are declared.
2.3.2 Jointly-controlled entity
The interest in a jointly controlled entity is accounted for using the equity method in the consolidated and the
cost method in the entity financial statements.
2.3.3 Associates
Associates are the entities which the SET influences, but does not control. In the consolidated financial statements,
investments in associates are initially recognised at cost and are subsequently accounted for using the equity method of accounting.
The SET’s share of its associates’ post-acquisition profits or losses is recognised in the statements of comprehensive
revenues and expenses. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.
When the SET’s share of losses in associates equal or exceed its interest in the associate, the SET does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the SET and its associates are eliminated to the extent of the SET’s interest in
the associates. Unrealised losses on transactions are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.