Ardagh Glass Finance plc - Irish Stock Exchange

ACCOUNTING POLICIES (Continued)
pension plan liabilities, losses on extinguishment of borrowings, and losses on derivative instruments
that are not designated as hedging instruments and are recognised in profit or loss.
The interest expense component of finance lease payments is recognised in the income statement
using the effective interest rate method.
FINANCE INCOME
Finance income comprise interest income on funds invested, certain foreign currency translation
gains related to financing, gains on derivative instruments that are not designated as hedging
instruments and are recognised in profit or loss. Interest income is recognised on a time proportion
basis.
INCOME TAX
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the tax basis of assets and liabilities. The following temporary differences are not provided for: goodwill
not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that
the reversal of the temporary difference is controlled by the Group and it is probable that they will not
reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the balance sheet date.
SEGMENT REPORTING
A segment is a distinguishable component of the Group that is engaged either in providing
products or services (business segment), or in providing products or services within a particular
economic environment (geographical segment), which is subject to risks and returns different to those
of other segments. Stemming from the Group’s internal organisational and management structure and
its system of internal financial reporting, segmentation by geography is regarded as being the
predominant source and nature of the risks and returns facing the Group and is thus the primary
segment. Business segmentation is the secondary segment.
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