Tiscali 2013 Annual Report Download - page 78

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
-
Annual Report as at 31
December 2013
78
Research and advertising costs
Research and advertising costs are charged directly to the income statement in the period they are
incurred.
Taxes
Income taxes include all the taxation calculated on the taxable income of Group companies.
- The tax currently payable is based on taxable income for the year. Taxable income differs
from the result reported in the income statement because it excludes items of income or
expense that are taxable or deductible in other years and it also excludes items that are never
taxable or deductible. Liability for current tax is calculated using tax rates applicable at the
balance sheet date.
- Deferred taxes are taxes which are expected to be paid or recovered on timing differences
between the book value of the balance sheet assets and liabilities and the corresponding
value for tax purposes used to calculate the taxable amounts, as well as on those items which,
despite not being allocated in the balance sheet, lead to potential future tax credits, such as
for example the losses for the year which can be used for tax purposes in the future, and are
calculated according to the balance sheet and liability method.
Deferred tax liabilities are generally recognised for all taxable timing differences relating to the Group
companies and to equity investments in associated companies, except where the Group is able to
control the reversal of these timing differences and it is unlikely that the timing difference will reverse in
the foreseeable future.
Deferred tax assets, arising from timing differences and/or previous losses, are recognised to the
extent that it is probable that taxable profits will be available in the future against which deductible
timing differences and/or previous losses can be utilised. The provisions are based on taxable income
likely to be generated in light of the approved business plans. Such assets and liabilities are not
recognised if the timing differences derive from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in transactions that affect neither the accounting
result nor taxable income. The book value of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer likely that sufficient taxable income will be available
to allow all or part of the assets to be recovered.
Deferred tax is calculated at the tax rates expected to apply in the period when the liability is settled or
the asset realised. Deferred tax is charged or credited to the income statement, except when it relates
to items charged or credited directly to equity, in which case the deferred tax is also dealt with under
equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority, and the Group intends to settle its current tax assets and liabilities on a net basis.
Earnings per share
The basic result per ordinary share is calculated by dividing the portion of the Group’s economic result
attributable to ordinary shares by the weighted average of the ordinary shares in circulation during the
financial year, excluding treasury shares.
For calculating the diluted result per ordinary share, the weighted average of shares in circulation is
changed by assuming the subscription of all potential shares deriving, for instance, from the
conversion of bonds, from exercising rights on shares with diluting effects, or from the potential diluting
effect due to the allocation of shares to the beneficiaries of already accrued stock option plans.