Peachtree 2015 Annual Report Download - page 115

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The Sage Group plc | Annual Report & Accounts 2015 113
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
Tax provisions
The Group recognises certain provisions and accruals in respect of tax which involve a degree of estimation and uncertainty where the tax
treatment cannot finally be determined until a resolution has been reached by the relevant tax authority. This approach resulted in providing
£32.8m as at 30 September 2015 (2014: £26.3m).
The carrying amount is sensitive to the resolution of issues which is not always within the control of the Group and it is often dependent on
the efficiency of the legal processes in the relevant taxing jurisdictions in which the Group operates. Issues can take many years to resolve
and assumptions on the likely outcome have therefore been made by management.
The nature of the assumptions made by management when calculating the carrying amounts relates to the estimated tax which could
be payable as a result of decisions by tax authorities in respect of transactions and events whose treatment for tax purposes is uncertain.
In making the estimates, management’s judgement was based on various factors, including:
– the status of recent and current tax audits and enquiries;
– the results of previous claims; and
– any changes to the relevant tax environments.
When making this assessment, we utilise our specialist in-house tax knowledge and experience of similar situations elsewhere to confirm
these provisions. These judgements also take into consideration specialist tax advice provided by third party advisors on specific items.
Future accounting standards
The directors also considered the impact on the Group of other new and revised accounting standards, interpretations or amendments.
The following revised and new accounting standard may have a material impact on the Group is currently issued but not yet effective for
the Group for the year ended 30 September 2015:
– IFRS 15, “Revenue from Contracts with Customers”.
The Group is in the process of assessing the impact that the application of this standard will have on the Group’s financial statements.