2009-10 Annual Report - Australia Post

5 Income tax (continued)
(e) unrecognised temporary differences
at 30 June 2010, there were no unrecognised temporary differences
(2009: $nil) associated with the group’s investments in controlled
entities or jointly controlled entities, as the group has no liability for
additional taxation should unremitted earnings be remitted.
(f) tax consolidation
australian postal corporation and its 100% owned australian resident
subsidiaries have formed a tax consolidated group with effect from
1 July 2004. australian postal corporation is the head entity of the
tax consolidated group. Members of the group have entered into a
tax sharing arrangement in order to allocate income tax expense to the
wholly owned subsidiaries on a pro-rata basis. in addition, the agreement
provides for the allocation of income tax liabilities between the entities
should the head entity default on its tax payment obligations.
no amounts have been recognised in the financial statements in respect
of this agreement on the basis that the possibility of default is remote.
tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding
agreement. the tax funding agreement provides for the allocation of
current taxes to members of the tax consolidated group in accordance
with their contribution to the actual tax payable by the head entity for
the period, while deferred taxes are allocated to members of the tax
consolidated group in accordance with the principles of aasB 112:
Income Taxes and UIG 1052: Tax Consolidation Accounting. allocations
under the tax funding agreement are made on an annual basis.
the allocation of taxes under the tax funding agreement is recognised
as an increase/decrease in the subsidiaries’ intercompany accounts with
the tax consolidated group head company, australian postal corporation.
Because under uiG 1052: Tax Consolidation Accounting the allocation
of current taxes to tax consolidated group members on the basis of
accounting profits is not an acceptable method of allocation given the
group’s circumstances, the difference between the current tax amount
that is allocated under the tax funding agreement and the amount that
is allocated under an acceptable method is recognised as a contribution/
distribution of the subsidiaries’ equity accounts. the group has applied
the group allocation approach in determining the appropriate amount
of current taxes to allocate to members of the tax consolidated group.
the amounts receivable or payable under the tax funding agreement
are due upon receipt of the funding advice from the head entity, which
is issued as soon as practicable after the end of each financial year.
the head entity may also require payment of interim funding amounts
to assist with its obligations to pay tax instalments.
all tax related contingencies are included in the schedule of contingencies.
AustrAliA Post AnnuAl rePort 2009–10 | Financial and statutory reports 63