Carphone Warehouse 2007 Annual Report Download - page 44

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Notes to the Financial Statements continued
The Carphone Warehouse Group PLC Annual Report 2007
40
Current taxation:
The complex nature of tax legislation across the tax jurisdictions in which the
Group operates necessitates the use of many estimates and assumptions,
where the outcome may differ from that assumed.
Deferred taxation:
The extent to which tax losses can be utilised depends on the extent to which
taxable profits are generated in the relevant jurisdictions in the foreseeable
future, and on the tax legislation then in force, and as such the value of
associated deferred tax assets is uncertain.
Provisions:
The Group’s reorganisation provisions are based on the best information
available to management at the balance sheet date. However, the future
costs assumed are inevitably only estimates, which may differ from those
ultimately incurred.
Sales provisions are based on historic patterns: of redemption for promotions,
product return rates for returns and warranties, and penalty rates from network
operators. The Group has extensive data in all areas; however, if the historic
patterns on which the provisions are based change significantly in the future,
the financial statements may be materially impacted.
Provisions relating to the disposal of excess property necessitate assumptions
in respect of period to disposal and exit costs, which may differ from the
ultimate cost of disposal.