Ratchaburi Electricity Generating Holding PCL.
149
Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries
Notes to the financial statements
28
Finance costs
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and
contingent consideration, losses on disposal of available-for-sale financial assets, dividends on
preference shares classified as liabilities, fair value losses on financial assets at fair value through
profit or loss, impairment losses recognised on financial assets (other than trade receivables), and
losses on hedging instruments that are recognised in profit or loss.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using the effective interest method
Deferred financing service fee
Deferred financing service fee is initially recorded at cost and carried at cost less accumulated
amortisation. Amortisation is calculated using the effective interest method over the life of the long-term
loan agreements and capitalised in power plant during construction. After construction is completed,
amortisation is made through the income statement. Deferred financing service fee is recognised as cost
of debt and deducted directly from long-term loans.
Other expenses
Other expenses are recognised in the statement of income as it accrues.
(r) Income tax
Income tax expense for the year comprises current and deferred tax. Current and deferred tax are
recognised in profit or loss except to the extent that they relate to a business combination, or items
recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years
.
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 the following temporary differences: the initial recognition of goodwill; 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; and differences relating to investments in
subsidiaries and jointly-controlled entities to the extent that it is probable that they will not reverse in
the foreseeable future.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which
the Group/Company expects, at the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, using tax rates enacted or substantively enacted at the reporting date.
In determining the amount of current and deferred tax, the Group/Company takes into account the
impact of uncertain tax positions and whether additional taxes and interest may be due. The
Group/Company believes that its accruals for tax liabilities are adequate for all open tax years based
on its assessment of many factors, including interpretations of tax law and prior experience. This
assessment relies on estimates and assumptions and may involve a series of judgements about future
events. New information may become available that causes the Group/Company to change its
judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact
tax expense in the period that such a determination is made.
Notes to the financial statements
Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries
