2013 Apr 15 Annual Report 2012 - Phosphagenics

Notes to the consolidated fi nancial statements
4. INCOME TAXES
Major components of income tax expense are:
2012
$’000’s
2011
$’000’s
Current income tax - -
Deferred income tax
Relating to origination and reversal of temporary differences - (13,830)
Income tax expense recorded in the statement of comprehensive
income - (13,830)
The prima facie income tax expense/(benefi t) on pre-tax accounting
profi t from operations reconciles to the income tax expense in the
fi nancial statements as follows:
Accounting (loss) before income tax (11,055) (12,724)
Income tax expense calculated at 30% (2010: 30%) (3,317) (3,817)
Non-deductible expenses 149 270
Derecognition of deferred tax liability from formation of tax
consolidated group - (13,830)
Unused tax losses and tax offsets not recognised as deferred tax
assets 3,168 3,547
Income tax benefi t reported in income statement - (13,830)
Deferred tax liabilities comprise:
Intellectual property - -
Unrecognised deferred tax balances
The following items have not been brought to account
as deferred tax assets:
Tax losses not recognised 21,384 20,435
Temporary differences not recognised - -
Total 21,384 20,435
87
Tax Losses
Deferred tax assets have not been recognised in respect of carried forward tax losses.
Tax consolidation
(i) Members of the tax consolidated group and the tax sharing arrangement
Phosphagenics Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated
group with effect from 1 July 2009. Phosphagenics Limited is the head entity of the tax consolidated
group. As a result the tax base of intangible assets was reset such that the deferred tax liability of
$13,830,498 was reversed during 2011.
(ii) Tax effect accounting by members of the tax consolidated group
Measurement method adopted under AASB Interpretation 1052 Tax Consolidation Accounting
The head entity and the controlled entities in the tax consolidated group continue to account for their own
current and deferred tax amounts. The Group has applied the Group allocation approach in determining
the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated
group. The current and deferred tax amounts are measured in a systematic manner that is consistent with
the broad principles in AASB 112 Income Taxes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS