Home' Slater and Gordon Annual Report : Slater and Gordon AR 2016 Contents Notes to the Financial Statements
For the Year Ended 30 June 2016
Slater and Gordon Limited
3.4 Income and Other Taxes
3.4.1 Accounting Policies
Income and other taxes consist of income tax, Goods and Services Tax and Value Added Tax.
Current income tax expense or benefit for the current and prior periods is measured at the amount expected to be
recovered from or paid to the tax authorities. The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the countries where the Group operates.
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 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. 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
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
Critical Accounting Estimates and Judgements
Deferred tax assets and liabilities are based on the assumption that no adverse change will occur in the income tax
legislation both in Australia and the UK and the anticipation that the Group will derive sufficient future assessable income
to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
Deferred tax assets are recognised only if management considers it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
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.
The major components of income tax expense are:
Consolidated statement of profit or loss
Current income tax (benefit)/expense
Adjustment for current tax relating to prior periods
Deferred income tax relating to the origination and reversal of temporary differences
Consolidated statement of OCI
Deferred tax credit arising on revaluation of cash flow hedges
Deferred tax charge arising on foreign exchange gain on revaluation of loans
Income tax recognised directly in equity
Current tax credit on share issue costs
64 Slater and Gordon Limited
Annual Report 2016
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