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NOTES TO THE FINANCIAL STATEMENTS
C A M B R I D G E I N D U S T R I A L T R U S T
A N N U A L R E P O R T 2 0 1 5
3.
Significant accounting policies (Cont’d)
3.7 Expenses (Cont’d)
(iii)
Trust expenses
Trust expenses are recognised on an accrual basis. Included in trust expenses are the trustee’s fees
which are based on the applicable rate stipulated in Note 1.
(iv)
Borrowing costs
Borrowing costs comprise interest expense on borrowings, amortisation of related transaction
costs which are recognised in the Statement of Total Return using the effective interest method
over the period of borrowings.
3.8 Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the
Statement of Total Return except to the extent that it relates to items directly related to Unitholders’ funds,
in which case it is recognised in Unitholders’ funds.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for:
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss;
•
temporary differences related to investment in subsidiaries and jointly controlled entity to the
extent that the Group is able to control the timing of the reversal of the temporary difference and
it is probable that they will not reverse in the foreseeable future; and
•
taxable temporary differences arising on the initial recognition of goodwill.
The measurement of deferred tax reflects the tax consequences that would follow 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 investment property that is measured at fair value, the presumption that the carrying
amount of the investment property will be recovered through sale has not been rebutted. Deferred tax is
measured at the tax rates that are expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets and they relate to income taxes levied by the same tax authority on the same entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or the
tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the unused tax losses and credits can be utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
