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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
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Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, where it
is probable that the asset will be utilised in the foreseeable future, except:
•
where the asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
•
in respect of deductible temporary differences associated with investments in subsidiaries and interests in joint ventures, only to the extent
that it is probable that the differences will reverse in the foreseeable future, and taxable profit will be available against which these differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax assets are re-assessed at
each reporting date and recognised to the extent it has become probable that future taxable profit will allow the asset to be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on tax
rates and laws that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged to profit or loss, except to the extent that it relates to a transaction that is recognised outside profit or loss or a business
combination that results from an acquisition. In this case, the deferred tax items are recognised in correlation to the underlying transaction
either in other comprehensive income or directly in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and they relate to income taxes levied by the same
taxation authority.
DIVIDENDS TAX
A Dividends Tax of 15% on dividend distributions is withheld from shareholders and paid to the South African Revenue Service, where applicable.
VALUE-ADDED TAX (VAT)
Revenues, expenses and assets are recognised net of the amount of VAT, except:
•
where the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognised
as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
•
receivables and payables are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement
of financial position.
EMPLOYEE BENEFITS
SHORT-TERM EMPLOYEE BENEFITS
All short-term benefits, including leave pay, are fully provided in the period in which the related service is rendered by the employees.
A liability is recognised when an employee has rendered services for benefits to be paid in the future, and an expense when the entity utilises
the economic benefit arising from the service provided by the employee.
DEFINED CONTRIBUTION PLANS
In respect of defined contribution plans, the contribution paid by the Group is recognised as an expense. If the employee has rendered the
service, but the contribution has not yet been paid, the amount payable is recognised as a liability.
DEFINED BENEFIT PLANS
The present value of the defined benefit obligation, the related current service costs and, where applicable, past service costs, are calculated
using the projected unit credit method, incorporating actuarial assumptions and a discount rate based on quality government bonds.
Re-measurements, comprising of actuarial gains and losses and the return on plan assets (excluding net interest), are recognised immediately
in the statement of financial position with a corresponding debit or credit to retained earnings through other comprehensive income in the
period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Current service costs are recognised in the statement of comprehensive income in profit or loss in those expense categories consistent with
the function of the employee cost.