Annual Report 2015
FINANCIAL SECTION
123
3 PRINCIPAL ACCOUNTING POLICIES
(continued)
(q) Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(r) Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within one year
or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current
liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method.
(s) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has
been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest
expense.
(t) Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events and whose existence will only be
confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the Group. It can also be a present obligation arising from past events that is not recognised because
it is not probable that outflow of economic resources will be required or the amount of obligation cannot be
measured reliably.
A contingent liability, other than that assumed in a business combination, is not recognised but is disclosed in
the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is
probable, it will then be recognised as a provision.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the
Group.
A contingent asset is not recognised but is disclosed in the notes to the financial statements when an inflow
of economic benefits is probable. When inflow is virtually certain, an asset is recognised.
