CHINESE ENTREPRENEURIAL CULTURE FOUNDATION

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.7 Provisions

Provisions are recognised when the Foundation has a present obligation (legal or constructive) as a result of a past event. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.8 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Foundation and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

Interest income

Interest income is recognised using the effective interest method.

2.9. Government grant

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Grants for the purchase of depreciable assets are offset directly against the cost of the specific asset. Grants received to meet operating expenses are recognised as income over the period necessary to match with the related expenses.

3. MEMBERS’ GUARANTEE

The members of the Foundation are members or ex-members of the Chamber.

The liability of each member is limited to $10 while he/she is a member, or within one year after he/she ceases to be a member.

4. INCOME TAX

The income of the Foundation is exempted from tax under section 13(1)(zm) of the Singapore Income Tax Act as the Foundation is a registered charity under the Singapore Charities Act.