Ubisoft 2008 Annual Report Download - page 149

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UBISOFT ANNUAL REPORT 2009
fI n a n c I a l s t a t e m e n t s 02
Income tax
Income tax (income or expense) includes the current tax expense (or income) and deferred tax expense (income). Tax is recognised
in prot and loss, unless it relates to items that are recognised directly in equity, in which case it is recognised in equity.
Current tax
Current tax is the estimated amount of tax owed on taxable income for an accounting period. It is determined using the tax rates
applicable at closing date.
Deferred tax
Deferred income tax is measured using the balance sheet liability method for all temporary differences between the carrying amount
of the assets and liabilities and their tax basis. The following situations do not lead to recognition of deferred tax: the recognition
of an asset or liability in a transaction that is not a business combination and which affects neither book prot nor taxable prot,
and temporary differences linked to subsidiary holdings insofar as these are unlikely to be reversed in the foreseeable future.
Measurement of deferred tax assets and liabilities depends on the way in which the Group expects to recover or settle the carrying
amount of the assets and liabilities using the tax rates applicable at the balance sheet date.
A deferred tax asset is only recognised where it is likely that the Group will have future taxable income against which the asset may
be utilised. Deferred tax assets are reduced to the extent that it is no longer likely that sufcient taxable income will be available.
The impact of possible changes in tax rates on previously recorded deferred tax is recognised in income except where it relates to
an item recognised in equity.
Deferred tax is shown in the balance sheet separately from current tax assets and liabilities and is classied as non-current items.
Methods of calculating earnings per share
Earnings per share
Basic earnings per share are equal to earnings divided by the weighted average number of shares in circulation minus treasury stock.
Diluted earnings per share
Diluted earnings per share are equal to:
• net income before dilution, plus the after-tax amount of any savings in nancial expenses resulting from the conversion of
the diluting instruments, divided by
• the weighted average number of ordinary shares in circulation, minus treasury stock, plus the number of shares that would be
created as a result of the conversion of instruments convertible into shares and the exercise of rights.
Segment reporting
In light of the Group's organisational structure and the commercial relationships between the various subsidiaries, we proceed on
the basis that the Group operates in a single market with several geographic regions.