TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

account exceeding the amount capitalised are recognised
as a liability under prepayments from customers.
Treasury shares
The cost of treasury shares is deducted from equity under
retained earnings on the date of acquisition. Similarly,
payments received in connection with the disposal of
treasury shares and dividends are recognised directly in
equity.
Dividends
Dividends expected to be distributed for the year are
recognised under a separate item in equity. Dividends and
interim dividends are recognised as a liability at the time of
adoption by the Annual General Meeting and the meeting of
the Board of Directors, respectively.
Currency translation reserve
Currency translation reserve comprises exchange rate
differences arising from translation into Danish kroner of
the functional currency of foreign enterprises’ financial
statements. Translation adjustments are recognised in the
Income Statements when the net investment is realised.
Current and deferred income taxes
Tax for the year comprises current income tax, changes in
deferred tax and adjustments from prior years.
Current income tax liabilities and current income tax
receivables are recognised in the Balance Sheets as income
tax payable or income tax receivable.
Deferred tax is measured under the balance-sheet liability
method on the basis of all temporary differences between
the carrying amounts and the tax bases of assets and
liabilities at the balance sheet date except for temporary
differences arising from goodwill on initial recognition and
other items where amortisation for tax purposes is
disallowed. Deferred income tax is provided on temporary
differences arising on investments in subsidiaries, joint
ventures and associates, except where the timing of the
reversal of the temporary difference is controlled by TDC
and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets including the tax value of tax-loss
carryforwards are recognised at the value at which they are
expected to be realised. Realisation is expected to be
effected either by elimination in tax on future earnings or by
set-off against deferred tax liabilities within the same legal
tax entity.
TDC Group Annual Report 2011
Adjustment of deferred tax is made concerning elimination
of unrealised intra-group profit and losses.
Deferred tax is measured on the basis of the tax rules and
tax rates in the respective countries that will be effective
under the legislation at the balance sheet date when the
deferred tax is expected to be realised as current income
tax. Changes in deferred tax as a result of changes in tax
rates are recognised in the Income Statements except for
the effect of items recognised directly in other
comprehensive income.
Provisions
Provisions are recognised when – as a consequence of an
event occurring before or on the balance sheet date – the
Group has a legal or constructive obligation, where it is
probable that economic benefits must be sacrificed to
settle the obligation, and the amount of the obligation can
be estimated reliably.
Provisions for restructuring, etc. are recognised when a final
decision thereon has been made before or on the balance
sheet date and has been announced to the parties involved,
provided that the amount can be measured reliably.
Provisions for restructuring are based on a defined plan,
which means that the restructuring is commenced
immediately after the decision has been made.
When the Group is under an obligation to demolish an asset
or re-establish the site where the asset was used, a liability
corresponding to the present value of estimated future
costs is recognised and an equal amount is capitalised as
part of the initial carrying amount of the asset. Subsequent
changes in such a decommissioning liability that result from
a change in the current best estimate of cash flows required
to settle the obligation or from a change in the discount
rate are added to (or deducted from) the amount
recognised for the related asset. However, to the extent
that such a treatment would result in a negative asset, the
effect of the change is recognised in profit or loss for the
year.
Provisions are measured at the Management’s best
estimate of the amount at which the liability is expected to
be settled. If the expenditure required to settle the liability
has a significant impact on the measurement of the liability,
such costs are discounted.
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