Nextmedia ar cover 21june op.co

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Next Media Limited annual report 06 07
Notes to the Consolidated Financial Statements (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
Taxation (continued)
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will
be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to the
consolidated income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Financial instruments
Financial assets and fi nancial liabilities are recognised on the balance sheets when an entity becomes a party to the contractual provisions of the instrument. Financial
assets and fi nancial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of fi nancial assets and fi nancial
liabilities (other than fi nancial assets and fi nancial liabilities at fair value through profi t or loss) are added to or deducted from the fair value of the fi nancial assets or fi nancial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of fi nancial assets or fi nancial liabilities at fair value through profi t
or loss are recognised immediately in the consolidated income statement.
Financial assets
The Group’s fi nancial assets are classifi ed into two categories, fi nancial assets at fair value through profi t or loss and loans and receivables. The accounting policies adopted
in respect of each category of fi nancial assets are set out below.
Financial assets at fair value through profi t or loss
Financial assets at fair value through profi t or loss include derivatives deemed as fi nancial assets held for trading. At each balance sheet date subsequent to initial
recognition, fi nancial assets of fair value through profi t or loss are measured at fair value, with changes in fair value recognised directly in the consolidated income
statement in the period in which they arise.