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Interest to the extent that it is probable that there are future taxable
Interest revenue is recognised when it is earned. profits available to recover the asset.
Other revenue Deferred tax assets and liabilities are offset only where
Other revenue is recognised when it is received or when there is a legally enforceable right to offset current tax
the right to receive payment is established. assets against current tax liabilities and deferred tax
assets against deferred tax liabilities; and they relate to
Customer loyalty program the same taxable authority on either the same taxable
The consolidated entity operates a loyalty program entity or different taxable entities which intend to settle
where customers accumulate points for purchases made simultaneously.
which entitle them to discounts on future purchases. The
reward points are recognised as a separately identifiable Specialty Fashion Group Limited (the ‘head entity’)
component of the initial sale transaction, by allocating and its wholly-owned Australian controlled entities
the fair value of the consideration received between the formed an income tax consolidated group under the tax
reward points and the other components of the sale such consolidation regime as of 1 July 2003. The head entity
that the reward points are recognised at their fair value. and the controlled entities in the tax consolidated group
Revenue from the reward points is recognised when the continue to account for their own current and deferred
points are redeemed. The amount of revenue is based tax amounts. The tax consolidated group has applied the
on the number of points redeemed relative to the total ‘separate taxpayer within group’ approach in determining
number expected to be redeemed. Reward points expire the appropriate amount of taxes to allocate to members
24 months after the initial sale or 30 days after a voucher of the tax consolidated group.
has been issued.
In addition to its own current and deferred tax amounts,
Income tax the head entity also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused
The income tax expense or benefit for the period is tax losses and unused tax credits assumed from each
the tax payable on that period’s taxable income based subsidiary in the tax consolidated group.
on the applicable income tax rate for each jurisdiction,
adjusted by changes in deferred tax assets and liabilities The entities have also entered into a tax funding
attributable to temporary differences, unused tax agreement under which the wholly-owned entities fully
losses and the adjustment recognised for prior periods, compensate Specialty Fashion Group Limited for any
where applicable. current tax payable assumed and are compensated
by Specialty Fashion Group Limited for any current tax
Deferred tax assets and liabilities are recognised for receivable and deferred tax assets relating to unused
temporary differences at the tax rates expected to apply tax losses or unused tax credits that are determined by
when the assets are recovered or liabilities are settled, reference to the amounts recognised in the wholly-owned
based on those tax rates that are enacted or substantively entities’ financial statements.
enacted, except for:
The amount receivable/payable under the tax funding
• When the deferred income tax asset or liability agreement is due upon receipt of the funding advice from
arises from the initial recognition of goodwill or an the head entity, which is issued as soon as practicable
asset or liability in a transaction that is not a business after the end of each financial year. The head entity may
combination and that, at the time of the transaction, also require payment of interim funding amounts to assist
affects neither the accounting nor taxable profits; or with its obligations to pay tax instalments.
• When the taxable temporary difference is associated Assets or liabilities arising under tax funding agreements
with interests in subsidiaries, associates or joint ventures, with the tax consolidated entities are recognised as amounts
and the timing of the reversal can be controlled and it is receivable from or payable to other entities in the tax
probable that the temporary difference will not reverse consolidated group. The tax funding arrangement ensures
in the foreseeable future. that the intercompany charge equals the current tax liability
or benefit of each tax consolidated group member, resulting
Deferred tax assets are recognised for deductible in neither a contribution by the head entity to the subsidiaries
temporary differences and unused tax losses only if it is nor a distribution by the subsidiaries to the head entity.
probable that future taxable amounts will be available to
utilise those temporary differences and losses. Current and non-current
classification
The carrying amount of recognised and unrecognised Assets and liabilities are presented in the statement of
deferred tax assets are reviewed each reporting date. financial position based on current and non-current
Deferred tax assets recognised are reduced to the extent classification.
that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. An asset is current when: it is expected to be realised
Previously unrecognised deferred tax assets are recognised or intended to be sold or consumed in normal operating
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