resulting from this calculation is limited to the unrecognized past service cost, plus the present value of available refunds
and reductions of future contributions to the plan.
Taxation
Income tax expense is the sum of the tax currently payable and deferred tax.
a. Current tax
According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as income tax in
the year the shareholders approve to retain the earnings.
Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.
b. Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences and unused loss carry forward to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and
liabilities are not recognized if the temporary difference arises from the initial recognition of other assets and liabilities in
a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in associates,
except where the Corporation can control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognized to the extent that it is probable that there will be
sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
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. A
previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates and laws that have been enacted or substantively enacted by
the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences
that would follow from the manner in which the Corporation expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.
c. Current and deferred taxes for the year
Current and deferred taxes are recognized in profit or loss, expect when they relate to items that are recognized in other
comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other
comprehensive income or directly in equity, respectively.
