Full annual report - African Bank - Investoreports

Notes to the group annual financial statements continued
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Temporary differences are differences between the carrying amounts of assets and liabilities
for financial reporting purposes and their taxation base. However, deferred taxation is not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting profit or loss nor taxable
income. The amount of deferred taxation provided is based on the taxation rates and laws enacted
or substantially enacted at the statement of financial position date.
Deferred taxation is charged or credited in profit or loss, except to the extent that it relates to items
charged or credited directly to the statement of changes in equity, in which case the deferred
taxation is also dealt with in equity.
The effect on deferred taxation of any changes in taxation rates is recognised in profit or loss, except
to the extent that it relates to items previously charged or credited directly to equity.
The deferred taxation related to fair value remeasurement of available-for-sale investments and
cash flow hedges, which are charged or credited directly to equity, is also credited or charged directly
to equity and is subsequently recognised in profit or loss together with the deferred gain or loss.
Deferred tax assets are recognised on the tax effects of income tax losses available for carry forward,
if the group considers it probable that future taxable income will be available against which the
unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each
statement of financial position date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to
be recovered.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred income tax
assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off
current income tax assets against current income tax liabilities and the deferred income taxes relate
to the same taxable entity and the same taxation authority.
4.22.2.3 STC
STC on dividends, net of STC credits earned, is provided for and expensed through profit or loss in
the period in which the dividend paid is accounted for. STC is payable only on dividends as defined
in the Income Tax Act.
To the extent that it is probable that dividends will be declared against which unused STC credits can
be utilised, a deferred tax asset is recognised for STC credits.
4.23 Share based payments
Share based payment transactions of the group primarily relate to the group’s long term incentive scheme for
employees. In addition, any issue of new ordinary shares pursuant to the creation of the group’s Black Economic
Empowerment programme is also treated as a share based transaction.
4.23.1 Share based payments under the group’s long term incentive plan (LTIP) for employees
The group has a cash-settled share appreciation rights scheme, in terms of which employees receive
units based on an initial value of an ABIL listed share, and receive on the maturity date the market value of the
units based primarily on the ABIL share price. This instrument qualifies as share based payments under IFRS 2 –
Share based Payment.