Page 39 - NZPM Annual Report 2020

NZPM GROUP LIMITED
Notes to the Consolidated Financial Statements for the year ended 31 March 2020

Taxation

The income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or loss
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the end of the reporting period.

Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using
the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can
be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit. In addition, a deferred tax liability is not recognised if the temporary difference arises from
the initial recognition of goodwill. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.

Property, plant and equipment
Property, plant and equipment are stated in the statement of financial position at cost or deemed cost, less accumulated
depreciation and accumulated impairment losses (if any). Cost includes expenditure that is directly attributable to the acquisition
of the item and in bringing the asset to the location and working condition for its intended use. Where significant parts of an item
of property, plant and equipment have different useful lives, they are accounted for separately. Freehold land is not depreciated.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight-line
method, on the following basis:
• plant and equipment 1-10 years
• leasehold improvements 10 years
• motor vehicles 4-10 years
• computer equipment 3-5 years

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect
of any changes in estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives, on the following
basis:
• software 3-10 years

The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any indefinite
useful lives that changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less accumulated impairment losses. An intangible asset is derecognised on disposal, or when
no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset,
measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss
when the asset is derecognised.

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NZPM GROUP LIMITED ANNUAL REPORT 2020