NOTES TO THE FINANCIAL STATEMENTS
10. Income tax expense/(benefit):// CONTINUED Prior period adjustments
Included in the adjustments related to prior periods are: Change in depreciation method During the year the group changed the tax depreciation method used for property, plant and equipment from the diminishing value method to the straight-line method. As a result the group recognised a $17.2 million current income tax expense and an equivalent deferred income tax credit. Tax dispute settlement On 12 August 2016, the Court of Appeal released their judgment in respect of a tax dispute between Vector and the Inland Revenue Department. The dispute related to the tax treatment of monies received from Transpower for various rights including access to Vector’s tunnel from Penrose to Hobson and the transmission corridor on the North Shore. The Court found in favour of Vector. Through the course of the dispute, Vector had taken a prudent approach and paid taxes in relation to the underlying transaction. As a result of the judgment and subsequent confirmation that the Commissioner of Inland Revenue will not appeal the Court of Appeal decision, Vector has recognised a $15.0 million income tax benefit. Income tax expense/(benefit) comprises current and deferred tax and is calculated using rates enacted or substantively enacted at balance date. Current and deferred tax is recognised in profit or loss unless the tax relates to items in other comprehensive income, in which case the tax is recognised as an adjustment in other comprehensive income against the item to which it relates.
Policies
Imputation credits
There are no imputation credits available for use as at 30 June 2017 (2016: nil), as the imputation account has a debit balance as of that date.
11. Deferred tax://
Deferred tax liability/ (asset)
PROVISIONS AND ACCRUALS $000
HEDGE RESERVES $000
PPE $000
OTHER $000
TOTAL $000
NOTE
Balance at 1 July 2015 Recognised in profit or loss
585,927 (14,500)
(27,809)
18,751 562,369
26,055
4,830
–
(10,543)
20,342 (6,911)
Recognised in other comprehensive income Deferred tax associated with discontinued operations
–
–
(6,911)
–
(118,791)
(511)
–
– (119,302)
Balance at 30 June 2016 Recognised in profit or loss
493,191 (10,181)
(34,720)
8,208 456,498
(13,240)
1,912
–
2,244
(9,084) 15,665 12,438
Recognised in other comprehensive income Recognised from business combinations
–
– –
15,665
– –
12,438 492,389
–
27
Balance at 30 June 2017
(8,269)
(19,055)
10,452 475,517
The group’s deferred tax position is presented in the balance sheet as follows:
2017 $000
2016 $000
Deferred tax asset Deferred tax liability
(104)
(715)
475,621 475,517
457,213 456,498
Total
91
Vector://AR 17
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