Home' Slater and Gordon Annual Report : Slater and Gordon AR 2015 Contents 77
Annual Report 2015 Slater and Gordon Limited
Notes to the Financial Statements
For the Year Ended 30 June 2015
Slater and Gordon Limited
Note 1: Statement of Significant Accounting Policies (continued)
(l) Taxation (continued)
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when the assets
are expected to be recovered or liabilities are settled. Deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred tax is also not accounted for if it arises from initial recognition of an asset or
liability in a transaction, other than a business combination, and at the time of the transaction affects neither accounting
nor taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred
tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future
taxable profits will be available against which they can be used.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.
Current and deferred tax for the year are recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also
recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises
from the initial accounting for a business combination, the tax effect is included in the accounting for the business
Tax consolidation (applicable to Australian entities only)
The Company and its wholly-owned Australian domiciled entities except for Slater & Gordon Lawyers listed in Note 30
have implemented the tax consolidation legislation and have formed a tax-consolidated group from 28 April 2011. As a
consequence, the Company and its controlled entities which comprise the tax consolidated group are taxed as a single
entity. New Australian domiciled entities acquired during the current year have joined the tax consolidation group from
the date of acquisition (refer to Note 31). The head entity within the tax consolidated group is Slater and Gordon Limited.
The parent entity and subsidiaries in the tax-consolidated group have entered into a tax funding arrangement such that
each entity in the tax-consolidated group recognises the assets, liabilities, expenses and revenue in relation to its own
transactions, events and balances only. This means that:
• the parent entity recognises all current and deferred tax amounts relating to its own transactions, events and
• the subsidiaries recognise current or deferred tax amounts arising in respect of their own transactions, events and
• current tax liabilities and deferred tax assets arising in respect of tax losses are transferred from the subsidiary to the
head entity as inter-company payables or receivables.
The tax-consolidated group also has a tax sharing agreement in place to limit the liability of subsidiaries in the tax-
consolidated group arising under the joint and several liability requirements of the tax consolidation system. No amounts
have been recognised in the financial statements in respect of this agreement on the basis that the possibility of default
Goods and Services Tax (“GST”) and Value Added Tax (“VAT”)
Revenue, expenses and assets are recognised net of the amount of GST/VAT, except where the GST/VAT incurred is
not recoverable from the Australian Taxation Office (“ATO”), UK Her Majesty’s Revenue and Customs (“HMRC”) or Malta
Inland Revenue (“MIR”) and is therefore recognised as part of the asset’s cost or as part of the expense item.
Receivables and payables are stated inclusive of GST/VAT.
The net amount of GST/VAT recoverable from, or payable to, the ATO/HMRC/MIR is included as part of receivables or
payables in the consolidated statement of financial position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST/VAT component of
investing and financing activities, which are disclosed as operating cash flows. Commitments and contingencies are
disclosed net of the amount of GST/VAT recoverable from, or payable to, the relevant taxation authority.
Links Archive Slater and Gordon AR 2014 Slater and Gordon AR 2016 Navigation Previous Page Next Page