Hock Lian Seng Holdings Limited - Annual Report 2015 - page 61

Notes to the Financial Statements
31 December 2015
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the disclosure of contingent liabilities at the end of each reporting period.
3.1 Judgments made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following judgments,
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The Group has exposure to income taxes mainly in Singapore. Significant judgment is involved in
determining the group-wide provision for income taxes. The Group recognises liabilities for expected tax
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income tax and deferred tax provisions in the period in which such determination is made.
The carrying amount of the Group’s income tax payable, deferred tax liabilities and deferred tax assets as
at 31 December 2015 were S$6,235,000 (2014: S$22,196,000), S$Nil (2014: S$3,000) and S$6,897,000 (2014:
S$6,978,000) respectively.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of
the reporting period are discussed below. The Group based its assumptions and estimates on parameters
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developments, however, may change due to market changes or circumstances arising beyond the control of the
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The Group recognises contract revenue based on the stage of completion method. The stage of completion
is determined based on surveys of work performed.
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contract costs. In making the judgment, the Group evaluates the stage of completion and the estimated
total costs by relying on past experience and the work of the project engineers.
The carrying amounts of assets and liabilities arising from construction contracts at the end of each
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had been 1% higher than management estimate, the carrying amount of the assets and liabilities arising
from construction contracts would have been S$332,800 (2014: S$5,556,724) lower and S$459,700 (2014:
S$321,177) higher respectively.
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incurred for construction projects during the defect liability and warranty periods.
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warranties. In making the judgment, the Group evaluates the estimated costs to be incurred by relying
on actual claim experiences and its best estimates of the expenditures expected to be incurred over the
remaining warranty periods.
The carrying amount of the provision for maintenance and warranties for construction contracts at the
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maintenance and warranty costs had been 5% higher than management estimate, the carrying amount
of the provision for maintenance and warranties arising from construction contracts would have been
S$2,269,000 (2014: S$2,203,000) higher.
ANNUAL REPORT 2015 59