Auckland Transport Statement of Intent 2012 - 2015

(m)
Current and deferred income tax
The income tax expense is the tax payable on the current period‟s taxable income, based on the New
Zealand tax rate, and adjusted for changes in deferred tax assets and liabilities, and adjustments to
income tax payable in respect of prior years.
Deferred tax assets and liabilities account for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities settled. This is based on those tax rates set by the
government. The relevant tax rates are applied to the cumulative amounts of deductible and taxable
temporary differences to measure the deferred tax asset or liability.
An exception is made for certain temporary differences from the initial recognition of an asset or a
liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they
came from a transaction, other than a business combination, that at the time of the transaction did not
affect accounting profit or taxable profit and loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only to
the extent it is likely that future taxable amounts will be available for Auckland Transport.
Current and deferred tax balances attributable to amounts recognised directly in equity, such as asset
revaluations, are also recognised directly in equity.
(n) Provisions
Provisions are recognised when:
Auckland Transport has a present legal or constructive obligation due to past events
it is more likely than not that an outflow of resources will be required to settle the obligation
the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditure expected to settle the obligation, using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the obligation.
Organisational
An organisational provision is recognised where there is a legal or constructive obligation to meet
redundancy expenses. The amount recorded in the financial statements is the estimated cost of this
expense.
Contractual
A contractual provision is recognised when legal claims have been issued against Auckland Transport for
past transactions and it is probable that Auckland Transport will be liable for these claims. The amount
recorded in the financial statements is the estimated cost of these claims.
(o) Creditors and other payables
These amounts represent unpaid liabilities for goods and services provided to Auckland Transport before
the end of the financial year. The amounts are unsecured and usually paid within 30 days of recognition.
Creditors and other payables are initially measured at fair value and subsequently measured at
amortised cost using the effective interest method.
(p) Goods and services tax (GST)
Items in the financial statements are exclusive of GST, with the exception of receivables and payables.
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