Holiday Inn 2015 Annual Report Download - page 110
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Notes to the Group Financial Statements continued
6. Finance costs
2015
$m
2014
$m
2013
$m
Financial income
Interest income on deposits 224
Interest income on loans and receivables 311
535
Financial expenses
Interest expense on borrowings 74 66 59
Finance charge payable under finance leases 20 19 19
Capitalised interest (2) (2) –
92 83 78
Interest income and expense relate to financial assets and liabilities held at amortised cost, calculated using the effective interest ratemethod.
Included within interest expense is $2m (2014: $2m, 2013: $2m) payable to the IHG Rewards Club loyalty programme relating to interest on the
accumulated balance of cash received in advance of the redemption of points awarded.
The rate used for capitalisation of interest was 3.4% (2014: 4.4%).
7. Tax
Tax on profit
Note
2015
$m
2014
$m
2013
$m
Income tax
UK corporation tax at 20.25% (2014: 21.50%, 2013: 23.25%):
Current period 7562
Benefit of tax reliefs on which no deferred tax previously recognised a ––(49)
Adjustments in respect of prior periods (17) 2–
(10) 713
Foreign tax: b
Current period 196 156 184
Benefit of tax reliefs on which no deferred tax previously recognised (1) (2) (42)
Adjustments in respect of prior periods (27) (26) (17)
168 128 125
Total current tax 158 135 138
Deferred tax:
Origination and reversal of temporary differences 60 68 122
Changes in tax rates and tax laws c(21) 2(1)
Adjustments to estimated recoverable deferred tax assets (13) 1(39)
Adjustments in respect of prior periods 426
Total deferred tax 30 73 88
Total income tax charge for the year 188 208 226
Further analysed as tax relating to:
Profit before exceptional items 180 179 175
Exceptional items:
Exceptional operating items (note 5) 829 6
Exceptional tax (note 5) ––45
188 208 226
All items above relate to continuing operations.
a In 2013, included $45m in respect of the utilisation of unrecognised capital losses against the gain on disposal of InterContinental London Park Lane.
b Represents corporate income taxes on profit taxable in foreign jurisdictions, a significant proportion of which relates to the Group’s US subsidiaries.
c In 2015, predominantly reflecting the judgement that state tax law changes would now apply to the deferred gain from the 2014 disposal of InterContinental New York Barclay.
108 IHG Annual Report and Form 20-F 2015