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68 Cathay Pacific Airways Limited Annual Report 2005
15. Deferred taxation
Group Company
2005 2004 2005 2004
HK$M HK$M HK$M HK$M
Deferred tax assets:
– Retirement benefits (15) (23) (24) (34)
– Provisions (19) (15) (19) (14)
– Tax losses (307) (125) (219) (43)
– Cash flow hedges – (158) – (158)
Deferred tax liabilities:
– Accelerated tax depreciation 1,311 949 1,006 710
– Cash flow hedges 7 – 7 –
Provision in respect of certain lease arrangements 5,483 6,652 5,483 6,652
6,460 7,280 6,234 7,113
Group Company
2005 2004 2005 2004
HK$M HK$M HK$M HK$M
Movements in deferred taxation comprise:
At 1st January 7,280 7,762 7,113 7,617
Movements for the year
– transfer from profit and loss account
– deferred tax expenses (note 4) 184 91 125 69
– operating expenses 173 163 173 163
– transferred to cash flow hedge reserve 165 (68) 165 (68)
– initial cash benefit from lease arrangements 343 – 343 –
Current portion of provision in respect of
certain lease arrangements included under
current liabilities – taxation (1,685) (668) (1,685) (668)
At 31st December 6,460 7,280 6,234 7,113
The Group has certain tax losses which do not expire under current tax legislation, a deferred tax asset has been
recognised to the extent that recoverability is considered probable.
The provision in respect of certain lease arrangements equates to payments which are expected to be made during
the years 2007 to 2016 (2004: 2006 to 2014) as follows:
2005 2004
HK$M HK$M
After one year but within five years 3,444 4,548
After five years but within ten years 1,770 2,104
After ten years 269 –
5,483 6,652
Notes to the Accounts Balance Sheet