Qantas 2010 Annual Report Download - page 64

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THE QANTAS GROUP 62
for the year ended 30 June 2010
Notes to the Financial Statements continued
5. Net Finance Costs
Qantas Group
2010
$M
2009
$M
FINANCE INCOME
Related parties
—Associates and jointly controlled entities 10 10
Unwinding of discount on receivables 19 33
Interest income on  nancial assets measured at amortised cost 152 164
Total  nance income 181 207
FINANCE COSTS
Finance leases 11 25
Interest expense on  nancial liabilities measured at amortised cost 272 287
Fair value hedges
—Fair value adjustments on hedged items (71) 379
—Fair value adjustments on derivatives designated in a fair value hedge 48 (403)
Less: capitalised interest1(44) (83)
Total  nance costs on  nancial liabilities 216 205
Unwinding of discount on provisions and other liabilities 40 24
Total  nance costs 256 229
Net  nance costs (75) (22)
1. The borrowing costs are capitalised using the average interest rate applicable to the Qantas Group’s debt facilities being 6.1 per cent (2009: 8.1 per cent).
6. Income Tax
Qantas Group
2010
$M
2009
$M
RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT
Current income tax expense
Current year –49
Adjustments for prior years –8
–57
Deferred income tax expense
Origination and reversal of temporary differences 317 15
Adjustments for prior years – (15)
Bene t of tax losses recognised (255) –
Utilisation of recognised tax losses –1
62 1
Total income tax expense in the Consolidated Income Statement 62 58
RECONCILIATION BETWEEN INCOME TAX EXPENSE AND STATUTORY PROFIT BEFORE INCOME TAX EXPENSE
Statutory pro t before income tax expense 178 181
Income tax using the domestic corporate tax rate of 30 per cent 53 54
Add/(less) adjustments for (non-assessable income)/non-deductible expenditure:
—Non-assessable gain on sale of Qantas Holidays and Qantas Business Travel – (26)
—Non-deductible share of net loss of associates and jointly controlled entities 1 5
—Utilisation of previously unrecognised losses (4) (11)
—Non-deductible writedown of investments and goodwill – 6
—Non-deductible infrastructure bond interest 99
—Other items 313
Under provision in prior years –8
Income tax expense 62 58
RECOGNISED IN THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Cash  ow hedges 46 (189)
Income tax expense/(bene t) recognised directly in the Consolidated Statement of Comprehensive Income 46 (189)