Air Canada 2008 Annual Report Download - page 112

Download and view the complete annual report

Please find page 112 of the 2008 Air Canada annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

2008 Air Canada Annual Report
112
7. FUTURE INCOME TAXES
The following income tax related amounts appear in the Corporation’s Consolidated Statement of Financial Position:
2008 2007
Liability
Long-term tax payable (a) $ (10) $ (10)
Future income tax liability (c) (88) (88)
$ (98) $ (98)
a)TaxesPayable
During 2007, Air Canada recorded a current income tax expense of $10 resulting from the Federal and Ontario harmonization
of corporate taxes. Air Canada will have a cash tax payable of $10 that will be payable over a five year period beginning in
2010. This amount is included in Other long-term liabilities.
b)ValuationAllowance
The Corporation has determined that it is more likely than not that future income tax assets of $1,157 are not recoverable
and have been offset by a valuation allowance. However, the future tax deductions underlying the future tax assets remain
available for use in the future to reduce taxable income. The benefit of future income tax assets that existed at fresh start,
and for which a valuation allowance is recorded, is recognized first to reduce to nil any remaining intangible assets (on a pro-
rata basis) that were recorded upon fresh start reporting with any remaining amount as a credit to Shareholders’ equity. The
benefit of future income tax assets that arise after fresh start are recognized in the Consolidated Statement of Operations.
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
$656, have indefinite 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.
The future income tax assets and liabilities are as follows:
2008 2007
Future tax assets
Loss carry forwards $ 588 $ 52
Post-employment obligations 466 556
Accounting provisions not currently deductible for tax 261 129
Tax basis of capital over book basis - 187
Deferred gains 40 8
Other 95 67
Total future tax assets 1,450 999
Futuretaxliabilities
Book basis of capital over tax basis 217 -
Intangible assets 126 135
Other 38 109
 Totalfuturetaxliabilities 381 244
Net future tax assets 1,069 755
Less valuation allowance (b) 1,157 843
Netrecordedfutureincometaxliability $ (88 ) $ (88)