Annual Report 2016
165
Financial Section
27 Deferred Taxation
(continued)
The movement in deferred tax assets and liabilities (prior to offsetting balances within the same taxation jurisdiction) during
the year was as follows:
Deferred tax assets
Provisions
Accelerated
accounting
depreciation
Tax losses
Unrealised intra-
group profit
Other items
Total
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
At beginning of the year
20.0
36.6
1.4
8.0
473.5
488.4
71.1
139.3
242.9
257.6
808.9
929.9
Translation differences
(1.2)
(0.5)
–
–
(16.0)
(11.1)
–
–
(15.2)
–
(32.4)
(11.6)
Transfer to non-current assets
classified as assets held for sale
–
–
–
–
–
(9.9)
–
–
–
–
–
(9.9)
Transfer to liabilities directly
associated with non-current
assets classified as assets
held for sale
–
–
–
–
(4.0)
–
–
–
–
–
(4.0)
–
(Charged)/credited to
consolidated income statement
(4.9)
(16.1)
9.9
(6.6)
(81.4)
6.1
(30.7)
(68.2)
(12.3)
(14.7)
(119.4)
(99.5)
At end of the year
13.9
20.0
11.3
1.4
372.1
473.5
40.4
71.1
215.4
242.9
653.1
808.9
Deferred tax liabilities
Accelerated
tax depreciation
Valuation of
properties
Fair value
adjustments of
properties on
acquisitions
Amortisation
of intangible
concession rights
Undistributed profits
of subsidiaries,
joint ventures and
associated companies
Other items
Total
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
HK$m
At beginning of the year
(2,704.4)
(2,623.3)
(1,609.3)
(1,423.4)
(1,869.3)
(1,907.4)
(2,143.4)
(2,260.9)
(808.6)
(769.9)
(288.6)
(192.2)
(9,423.6)
(9,177.1)
Translation differences
20.6
(1.7)
96.2
0.1
105.5
0.1
139.9
–
46.7
(0.1)
1.3
(16.0)
410.2
(17.6)
Acquisition of subsidiaries
–
(1.0)
–
–
–
(5.7)
–
–
–
(0.3)
–
–
–
(7.0)
Disposal of subsidiaries
(2.6)
29.0
124.9
–
177.9
–
–
–
62.9
–
–
1.3
363.1
30.3
Written back upon disposal
of intangible concession
rights
–
–
–
–
–
–
33.8
–
–
–
–
–
33.8
–
Transfer to current tax payable
–
–
–
–
–
–
–
–
16.7
4.2
–
–
16.7
4.2
Transfer to non-current
assets classified as assets
held for sale
–
(24.1)
–
–
–
–
–
–
–
–
–
–
–
(24.1)
Transfer to liabilities
directly associated with
non-current assets
classified as assets
held for sale
60.8
–
–
–
–
–
–
–
–
–
–
–
60.8
–
(Charged)/credited to
consolidated income
statement
(23.8)
(83.3)
(60.5)
(178.5)
215.6
43.7
85.9
117.5
(191.0)
(42.5)
(10.1)
(23.7)
16.1
(166.8)
(Charged)/credited to
reserves
–
–
(5.0)
(7.5)
–
–
–
–
–
–
106.5
(58.0)
101.5
(65.5)
At end of the year
(2,649.4)
(2,704.4)
(1,453.7)
(1,609.3)
(1,370.3)
(1,869.3)
(1,883.8)
(2,143.4)
(873.3)
(808.6)
(190.9)
(288.6)
(8,421.4)
(9,423.6)
Deferred tax assets are recognised for tax loss carried forward to the extent that realisation of the related tax benefit
through the future taxable profits is probable. The Group has unrecognised tax losses of HK$17,079.4 million (2015:
HK$17,961.5 million) to carry forward for offsetting against future taxable income. These tax losses have no expiry dates
except for the tax losses of HK$4,641.1 million (2015: HK$3,494.8 million) which will expire at various dates up to and
including 2021 (2015: 2020).
For the investment properties that are located outside Hong Kong, they are held by certain subsidiaries with a business
model to consume substantially all the economic benefits embodied in the investment properties over time, rather than
through sale, the presumption is rebutted and related deferred tax continues to be determined based on recovery of use.
For the remaining investment properties, the tax consequence is on the presumption that they are recovered entirely by
sale.
As at 30 June 2016, the aggregate amount of temporary differences associated with investments in subsidiaries and joint
ventures for which deferred tax liabilities have not been recognised totalled approximately HK$7.5 billion (2015: HK$9.2
billion), as the directors consider that the timing of reversal of the related temporary differences can be controlled and the
temporary differences will not be reversed in the foreseeable future.
