AFRICAN DAWN ANNUAL REPORT 2017 37 Accounting Policies continued 1.7 Employee benefits Short-term employee benefits The Group provides only short-term employee benefits. There are no post retirement employee benefits. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance. 1.8 Income taxes Tax expense The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement. Current taxation Current taxation is the expected tax payable on the taxable income for the year, using taxation rates enacted or substantively enacted at the reporting date, and any adjustment to taxation payable in respect of previous years (prior- period tax paid). Deferred tax Deferred taxation 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 taxation is recognised in profit or loss for the period, except to the extent that it relates to a transaction that is recognised directly in equity or in other comprehensive income, or a business combination that is accounted for as an acquisition. Deferred taxation assets are recognised to the extent that it is probable that future taxable income will be available against which the unutilised taxation losses and deductible temporary differences can be used. Deferred taxation assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxation benefits will be realised. Deferred taxation assets and liabilities are offset if there is a legally enforceable right to offset current taxation liabilities against current taxation assets, and they relate to income taxes levied by the same taxation authority on the same taxable entity, or on different taxation entities, but they intend to settle current tax liabilities and assets on a net basis or their taxation assets and liabilities will be realised simultaneously. 1.9 Property, plant and equipment Property, plant and equipment is carried at historical cost less accumulated depreciation and any accumulated impairment losses. Depreciation is recognised so as to write off the cost of assets over their estimated useful lives, to their residual values. The straight-line method is used and the estimated useful lives are as follows: Property, plant and equipment Item Depreciation method Average useful life Furniture and fixtures Straight line 4 - 6 years IT equipment Straight line 3 - 5 years Leasehold improvements Straight line Length of leases Motor vehicles Straight line 5 years Office equipment Straight line 3 - 5 years Telephone equipment Straight line 5 years Leased assets are depreciated at the shorter of the useful life or the period of the lease.
AFRICAN DAWN 2017
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