LensCrafters 2015 Annual Report Download - page 105

Notes to the consolidated financial statement as of December 31, 2015 Page 11 di 68
Current and deferred taxes
The tax expense for the period comprises current and deferred tax.
Tax expenses are recognized in the consolidated statement of income, except to the extent that they relate to items recognized in
OCI or directly in equity. In this case, tax is also recognized in OCI or directly in equity, respectively. The current income tax
charge is calculated on the basis of the tax laws enacted or substantially enacted at the balance sheet date in the countries where
the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities. Interest and penalties associated with these positions are
included in “provision for income taxes” within the consolidated statement of income.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from
the initial recognition of goodwill. Deferred income tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted as of the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the
deferred income tax liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is provided on
temporary differences arising on investments in subsidiaries and associates, except for deferred tax liabilities where the timing
of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an
intention to settle the balances on a net basis.
Employee benefits
The Group has both defined benefit and defined contribution plans.
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define an
amount of pension benefit that an employee will receive upon retirement, usually dependent on one or more factors such as age,
years of service and compensation. The liability recognized in the consolidated statement of financial position in respect of
defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets, together with adjustments for unrecognized past-service costs. The defined benefit obligation is calculated
annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the
related pension obligation.
Actuarial gains and losses due to changes in actuarial assumptions or to changes in the plan’s conditions are recognized as
incurred in the consolidated statement of comprehensive income.