2012 annual report - TLA Worldwide

48 TLA Worldwide PLCsmallest identifiable group of assets that generates cash inflows that are largely independent ofthe cash flow from other assets or group of assets. Details of which are set out in note 10.taxationThe tax expense represents the sum of the tax currently payable and deferred tax.The tax currently payable is based on taxable profit for the year. Taxable profit differs from netprofit as reported in the income statement because it excludes items of income or expense thatare taxable or deductible in other years and it further excludes items that are never taxableor deductible. The Group’s liability for current tax is calculated using tax rates that have beenenacted or substantively enacted by the balance sheet date.Deferred tax is the tax expected to be payable or recoverable on differences between thecarrying amounts of assets and liabilities in the financial statements and the correspondingtax bases used in the computation of taxable profit, and is accounted for using the balancesheet liability method. Deferred tax liabilities are generally recognised for all taxabletemporary differences and deferred tax assets are recognised to the extent that it is probablethat taxable profits will be available against which deductible temporary differences can beutilised. Such assets and liabilities are not recognised if the temporary difference arises fromthe initial recognition of goodwill or from the initial recognition (other than in a businesscombination) of other assets and liabilities in a transaction that affects neither the taxableprofit nor the accounting profit.Deferred tax liabilities are recognised for taxable temporary differences arising on investmentsin subsidiaries and associates, and interests in joint ventures, except where the Groupis able to control the reversal of the temporary difference and it is probable that the temporarydifference will not reverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at each balance sheet date and reducedto the extent that it is no longer probable that sufficient taxable profits will be available toallow 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 theliability is settled or the asset is realised. Deferred tax is charged or credited in the incomestatement, except when it relates to items charged or credited directly to equity, in which casethe deferred tax is also dealt with in equity.Deferred tax assets and liabilities are offset when there is a legally enforceable right to set offcurrent tax assets against current tax liabilities and when they relate to income taxes leviedby the same taxation authority and the Group intends to settle its current tax assets andliabilities on a net basis.Foreign currenciesThe individual financial statements of each group company are presented in the currency ofthe primary economic environment in which it operates (its functional currency). For thepurpose of the consolidated financial statements, the results and financial position of eachgroup company are expressed in US dollars, which is the presentation currency for theconsolidated financial statements.In preparing the financial statements of the individual companies, transactions in currenciesother than the entity’s functional currency (foreign currencies) are recognised at the rates ofexchange prevailing on the dates of the transactions. At each balance sheet date, monetaryassets and liabilities that are denominated in foreign currencies are retranslated at the ratesprevailing at that date. Non-monetary items carried at fair value that are denominated inforeign currencies are translated at the rates prevailing at the date when the fair value wasdetermined.Non-monetary items that are measured in terms of historical cost in a foreign currency arenot retranslated.Exchange differences are recognised in profit or loss in the period in which they ariseexcept for: