Cathay Pacific 2007 Annual Report Download - page 72

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Notes to the Accounts
Balance Sheet
16. Deferred taxation
Group Company
2007
HK$M
2006
(restated)
HK$M
2007
HK$M
2006
HK$M
Deferred tax assets:
– retirement benefits (52) (25) (52) (29)
– provisions (141) (107) (82) (69)
– tax losses (512) (698) (346) (497)
– cash flow hedges (87) (71) (65) (71)
Deferred tax liabilities:
– accelerated tax depreciation 2,052 1,978 1,503 1,419
Provision in respect of certain lease arrangements 5,511 5,431 4,502 4,332
6,771 6,508 5,460 5,085
Group Company
2007
HK$M
2006
(restated)
HK$M
2007
HK$M
2006
HK$M
Movements in deferred taxation comprise:
At 1st January 6,508 6,460 5,085 6,234
Movements for the year
– transfer from profit and loss account
– deferred tax expenses (note 5) 199 197 199 80
– operating expenses 141 148 103 138
– transferred to cash flow hedge reserve (16) (78) 6(78)
– initial cash benefit from lease arrangements 987 358 839 286
– purchase of a subsidiary (restated) –1,129 ––
Current portion of provision in respect of
certain lease arrangements included
under current liabilities – taxation (1,048) (1,706) (772) (1,575)
At 31st December 6,771 6,508 5,460 5,085
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 2009 to 2018 (2006: 2008 to 2017) as follows:
Group Company
2007
HK$M
2006
HK$M
2007
HK$M
2006
HK$M
After one year but within five years 3,183 3,240 2,637 2,656
After five years but within 10 years 1,548 1,907 1,204 1,450
After 10 years 780 284 661 226
5,511 5,431 4,502 4,332
Cathay Pacific Airways Limited Annual Report 2007
70