NOTES TO THE FINANCIAL STATEMENTS continued
09. Income tax expense/ (benefit):// CONTINUED Other adjustments
MEL Network Limited removal MEL Network Limited (MEL), a wholly owned subsidiary of Vector, was removed from the Companies Office register on 27 March 2018. Following the removal, the related party advance between MEL and Vector Limited was written off, resulting in an income tax benefit of $16.7m to the group. A private binding ruling was obtained to confirm the tax benefit. Change in depreciation method The group recognised a $17.2 million income tax expense and an equivalent deferred income tax credit in the prior year in relation to the group’s decision to change the tax depreciation method used for property, plant and equipment from the diminishing value method to the straight-line method. Tax dispute settlement Vector recognised a $15.0 million income tax benefit as a prior period adjustment in the prior year. The adjustment was made following a judgment made by the Court of Appeal in respect of a tax dispute between Vector and the Inland Revenue. 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 of Appeal found in favour of Vector. 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.
Prior period adjustments
Policies
Imputation credits
There are no imputation credits available for use as at 30 June 2018 (2017: nil), as the imputation account has a debit balance as of that date.
10. Deferred tax://
Deferred tax liability/(asset)
PROVISIONS AND ACCRUALS $M
PPE AND INTANGIBLES $M
HEDGE RESERVES $M
OTHER $M
TOTAL $M
NOTE
Balance at 1 July 2016 Recognised in profit or loss
493.2
(10.2)
(34.7)
8.2 2.2
456.5
(13.2)
1.9
–
(9.1)
Recognised in other comprehensive income Recognised from business combinations
–
– –
15.7
– –
15.7 12.4
12.4
–
Balance at 30 June 2017 Recognised in profit or loss
492.4
(8.3)
(19.0)
10.4
475.5
23.5
(11.3)
–
(3.5)
8.7 3.5
Recognised in other comprehensive income Recognised from business combinations
–
– –
3.5
– –
(1.1)
–
(1.1)
25
Balance at 30 June 2018
514.8
(19.6)
(15.5)
6.9
486.6
80
Vector://AR 18
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