Air Canada 2007 Annual Report Download - page 106
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2007 Air Canada Annual Report
106
c) Future Income Tax Liability
It has been assumed that certain intangibles and other assets with nominal tax cost and a carrying value of approximately
$661, have indeļ¬ nite lives and accordingly, the associated future income tax liability is not expected to reverse until the
assets are disposed of or become amortizable, resulting in the reporting of a future income tax liability of $88.
2007 2006
Future tax assets
Loss carry forwards $ 52 $ 27
Post-employment obligations 556 685
Accounting provisions not currently deductible for tax 129 180
Tax basis of capital assets over book basis 187 278
Eligible capital expenditures 2 10
Unearned revenues 13 393
Other 60 50
Total future tax assets 999 1,623
Future tax liabilities
Intangible assets 135 210
Other 109 33
Total future tax liabilities 244 243
Net future tax assets 755 1,380
Less valuation allowance (b) 843 1,169
Net recorded future income tax asset (liability) (1) $ (88 ) $ 211
(1) As at December 31, 2007, the future income tax liability of $88 is recorded in long-term liabilities. As at December 31, 2006 the net recorded future income tax asset is
comprised of a future income tax asset of $345 recorded in current assets (refer to (a) above) and a future income tax liability of $134 recorded in long-term liabilities.
The reconciliation of income tax attributable to continuing operations, computed at the statutory tax rates, to income tax
expense (recovery) is as follows:
2007 2006
Provision (recovery) based on combined federal and provincial rates $ 206 $ (25 )
Non-taxable portion of capital gains (32 ) 1
Non-deductible expenses 17 14
Effect of tax rate changes on future income taxes (3 ) 2
Effect of statutory tax rates substantively enacted during the year 67 64
Other 11 2
266 58
Valuation allowance (76 ) (61 )
Provision for (recovery of) income taxes $ 190 $ (3 )