93 / 136
91
Taxation
NOTE 18
INCOME TAX EXPENSE
18
Accounting policy
– Income tax expense
The income tax expense or benefit for the period represents the tax payable on the current period’s taxable
income based on the Australian corporate income tax rate (30%) adjusted by changes in deferred tax assets
and liabilities attributable to the temporary differences between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, and unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appro-
priate on the basis of amounts expected to be paid to the tax authorities.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the income
statement.
Tax consolidation legislation
Some of the entities within the Consolidated entity have formed tax consolidated groups under the tax consolida-
tion regime. The Australian Tax Office has been notified on these decisions.
Controlled entities within the relevant tax consolidated groups, continue to be responsible under tax funding
agreements, for funding their share of tax payments that are required to be made by the head entity in their
tax consolidation group. These tax amounts are measured as if each entity within the tax consolidated group,
continues to be a stand-alone tax payer in their own right.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the Group.
Any differences between the amounts assumed and amounts receivable or payable under the tax funding
agreements are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
2016
2015
$’000
$’000
a) Income tax expense/(benefit) comprises:
Current income tax expense/(benefit)
Current year
2,278
18,152
Adjustments in respect of prior years
(4,185)
(3,422)
Deferred income tax (benefit)/expense
– Relating to the origination and reversal of temporary differences
(765)
(30,720)
– Petroleum resource rent tax expense/(benefit)
3,574
(961)
Income tax expense/(benefit) recognised in the income statement
902
(16,951)
Deferred income tax expense/(benefit) included in income tax
expense comprises:
(Increase) in deferred tax assets
(33,944)
(19,188)
Increase/(decrease) in deferred tax liabilities
36,753
(12,493)
2,809
(31,681)