Page 99 - China Mobile Limited - Annual Report 2012

China Mobile Limited
Annual Report 2012
93
Notes to the Financial Statements
(Expressed in Renminbi unless otherwise indicated)
1 Significant Accounting Policies (Continued)
(s) Income tax (Continued)
Current tax balances and deferred tax balances, and movements therein, are presented separately from each
other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets
against deferred tax liabilities, if the Group or the Company has the legal, enforceable right to set off current tax
assets against current tax liabilities and the following additional conditions are met:
– in the case of current tax assets and liabilities, the Group or the Company intends either to settle on a net
basis, or to realize the asset and settle the liability simultaneously; or
– in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation
authority on either:
– the same taxable entity; or
– different taxable entities, which, in each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered, intend to realize the current tax assets
and settle the current tax liabilities on a net basis or realize and settle simultaneously.
(t) Provisions and contingent liabilities
Provisions are recognized for liabilities of uncertain timing or amount when the Group or the Company has a legal
or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits
will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is
material, provisions are stated at the present value of the expenditures expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits
is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of
one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.
(u) Employee benefits
(i) Short term employee benefits and contributions to defined contribution retirement plans
Salaries, annual bonuses, paid annual leave, leave passage, contributions to defined contribution retirement
plans and the cost of non-monetary benefits are accrued in the year in which the associated services are
rendered by employees. Where payment or settlement is deferred and the effect would be material, these
amounts are stated at their present values.
The Company and subsidiaries incorporated in the Hong Kong Special Administrative Region of the PRC
(“Hong Kong”) are required to make contributions to Mandatory Provident Funds under the Hong Kong
Mandatory Provident Fund Schemes Ordinance. Such contributions are recognized as an expense in profit
or loss as incurred.