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Notes to the Financial Statements 2018
28. Taxation continued
Year ended June 2018 NZ$M
Year ended June 2017 NZ$M
Fletcher Building Group
Provision for deferred tax assets/(liabilities) Included within the balance sheet as follows: Deferred tax assets
161
52
(37)
Deferred tax liabilities
(47)
124
5
5 9
Opening provision for deferred tax assets/(liabilities)
(34)
Taxation (expense)/benefit Deferred tax on acquisitions Transfer from current tax
(1) (7)
120
42
(10)
Tax recognised directly in reserves
5 5
124
Composed of: Provisions
232
154
21
Inventories
18
5
Debtors
4
(74)
Property, plant and equipment
(74)
(120)
Brands
(138)
62
Tax losses Pensions
40
(2)
(1)
Other
2
124 5 The Group has recognised certain tax losses available in Australia, USA and Germany on the basis that the respective companies will have future assessable income. The tax losses have been recognised on the basis of the forecast earnings set out in the companies' strategic plans. The Group reviews future loss utilisations at each reporting period. The Group has unrecognised tax losses in France, Spain, Sweden, UK, India and China of $136 million representing $485 million of gross tax losses (June 2017: $124 million, $445 million gross losses). 29. Retirement plans Fletcher Building Limited is the principal sponsoring company of a plan that provides retirement and other benefits to employees of the Group in New Zealand. Participation in this plan has been closed for a number of years, although defined contribution savings plans have been made available. Various defined benefit and defined contribution plans exist in Australia following the acquisition of Crane, Amatek, Tasman Building Products, and the Laminex groups which companies contribute to on behalf of their employees. Various defined benefit plans and medical plans exist in other countries as a result of the acquisition of the Formica group, which companies contribute to on behalf of their employees. Where the plans have a deficit in their funded status, the companies are making additional contributions, as recommended by the trustees of the plans, to improve the funded status. The Formica US Pension Plan was terminated during the year, leading to the de-recognition of approximately US$80 million of pension plan assets and defined benefit obligations from the Group’s balance sheet. The termination led to a charge of NZ$3 million to the Group income statement, as outlined in Note 4. The Group’s plan assets and liabilities in respect of individual retirement plans are calculated separately for each plan by an independent actuary, as being the fair value of the plan’s assets less the present value of the future obligations to the members. The value of the asset recognised cannot exceed the present value of any future refunds from the plans or reductions in future contributions to the plans, unless a constructive right to a refund of the surplus exists, in which case the amount to be refunded is recognised as an asset. In the Group’s balance sheet, plans that are in a surplus position are not offset with plans that are in a liability position. Obligations for contributions to defined contribution plans are recognised in earnings as incurred. The actuarial cost of providing benefits under defined benefit plans is expensed as it accrues over the service life of the employees, after taking account of the income expected to be earned by the assets owned by the plans.
96 Fletcher Building Limited Annual Report 2018
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