NOTES TO FINANCIAL STATEMENTS
December 31, 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at tax rates that are expected to apply in the period when the liability is settled or the
asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of
the reporting period. Except for investment properties measured using the fair value model, the measurement of
deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the
Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are
measured using the fair value model, the carrying amounts of such properties are presumed to be recovered through
sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable
and is held within a business model of the Group whose business objective is to consume substantially all of the
economic benefits embodied in the investment property over time, rather than through sale. The Group has rebutted
the presumption that the carrying amount of the investment properties will be recovered entirely through sale.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items
credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case
the tax is also recognised outside profit or loss (either in other comprehensive income or directly in equity), or where
they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect
is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value
of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.
FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each
Group entity are measured and presented in the currency of the primary economic environment in which the entity
operates (its functional currency). The presentation currency for the consolidated financial statements of the Group
and the statement of financial position of the Company is RMB.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each
reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the
end of each reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies
are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are
included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items
carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of
non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such
non-monetary items, any exchange component of that gain or loss is also recognised directly in other comprehensive
income.
YANLORD LAND GROUP LIMITED
ANNUAL REPORT 2015
82
