Share-based compensation Current and deferred taxes
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2011
Cash flow hedge The effective portion of changes in the fair value of a derivative
designated and qualifying as a hedge of future cash flows is recognised in other comprehensive income and accumulated
under the cash flow hedge reserve in equity, and reclassified to the income statement in the periods when the hedged forecast
cash flows affect the income statement. The ineffective portion of the gain or loss is recognised immediately in the income
statement under “Net trading income”.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in the cash flow hedge reserve remains until the forecast transaction is ultimately recognised in
the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss in the
cash flow hedge reserve is reclassified from equity to the income statement.
Hedge of net investment in a foreign operation Hedges of net investments in the Group’s foreign operations are
accounted for in a manner similar to cash flow hedges. The gain or loss from the derivative relating to the effective portion
of the hedge is recognised in other comprehensive income and accumulated under the capital reserves in equity. The gain or
loss relating to the ineffective portion of the hedge is recognised immediately in the income statement under “Net
trading income”. On disposal of the foreign operations, the cumulative gain or loss in the capital reserves is reclassified to
the income statement under “Net trading income”. 2.16
Employee benefits
Employee benefits, which include base pay, cash bonuses, share-based compensation, contribution to defined contribution
plans such as the Central Provident Fund and other staff-related allowances, are recognised in the income statement when
incurred. For defined contribution plans, contributions are made to publicly or privately administered funds on a mandatory,
contractual or voluntary basis. Once the contributions have been paid, the Group has no further payment obligations.
Employee entitlement to annual leave is recognised when they accrue to employees. A provision is made for the estimated
liability for annual leave as a result of services rendered by employees up to the balance sheet date.