Page 92 - Continental Reinsurance 2022 Annual Report
P. 92
90 Statement of Significant Accounting Policies
(and laws) that have been enacted or substantially comprehensive income and subsequently in the
enacted by the reporting date and are expected to consolidated statement of profit or loss and other
apply when the related deferred income tax asset is comprehensive income together with the deferred
realised or the deferred income tax liability is settled. gain or loss.
b Deferred income tax (continued) Deferred tax assets and deferred tax liabilities can only
The principal temporary differences arise from be offset in the statement of financial position if the
depreciation of property, plant and equipment, entity has the legal right to settle current tax amounts
revaluation of certain financial assets and liabilities, on a net basis and the deferred tax amounts are levied
provisions for pensions and other post-retirement by the same taxing authority on the same entity or
benefits and carry-forwards and, in relation to different entities that intend to realise the asset and
acquisitions, on the difference between the fair values settle the liability at the same time.
of the net assets acquired and their tax base.
However, the deferred income tax is not accounted for Sales tax
if it arises from initial recognition of an asset or liability Expenses and assets are recognised net of the amount
in a transaction other than a business combination of sales tax, except: When the sales tax incurred on a
that at the time of the transaction affects neither purchase of assets or services is not recoverable from
accounting nor taxable profit or loss. the taxation authority, in which case, the sales tax is
recognised as part of the cost of acquisition of the
The tax effects of carry-forwards of unused losses, asset or as part of the expense item, as applicable?
unused tax credits and other deferred tax assets are When receivables and payables are stated with the
recognised when it is probable that future taxable amount of sales tax included The net amount of sales
profit will be available against which these losses and tax recoverable from, or payable to, the taxation
other temporary differences can be utilised. authority is included as part of receivables or payables
in the statement of financial position.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the 2.22 Employment benefits
carrying amount of the asset or liability and is not
discounted. Deferred tax assets are reviewed at each Defined contributory scheme
reporting date and are reduced to the extent that it is A defined contribution plan is a pension plan under
no longer probable that the related tax benefit will be which the Group pays fixed contributions into a
realised. separate entity.
Deferred income tax is provided on temporary The Group has no legal or constructive obligations to
differences arising from investments in subsidiaries pay further contributions if the fund does not hold
and associates, except where the timing of the reversal sufficient assets to pay all employees the benefits
of the temporary difference is controlled by the Group relating to employee service in the current and prior
and it is probable that the difference will not reverse in periods.
the foreseeable future.
Deferred tax assets for deductible temporary In line with the Pension Reform Act 2014, the Group
differences arising from investments in subsidiaries are operates a defined contribution scheme; employees
only recognised to the extent that it is probable that are entitled to join the scheme on confirmation of their
the temporary difference will reverse in the employment. The employee and the Group contribute
foreseeable future and that taxable profit will be 8% and 10% of the employee's total emoluments
available against which the temporary difference will (basic, housing and transport allowances) respectively.
be utilized. The Group's contribution each year is charged against
income and is included in staff cost. The Group has no
Liabilities arising from temporary differences further payment obligations once the contributions
associated with investments in subsidiaries, but only to have been paid. The contributions are recognised as
the extent that the entity is able to control the timing of employee benefit expenses when they are due.
the reversal of the differences and it is probable that
the reversal will not occur in the foreseeable future. Defined benefit staff gratuity scheme
A defined benefit plan is a pension plan that defines an
Deferred tax related to fair value re-measurement of amount of pension benefit that an employee will
equity instruments, which are recognised in other receive on retirement, usually dependent on one or
comprehensive income, is also recognised in other more factors, such as age, years of service and
compensation.
