Ubisoft 2012 Annual Report Download - page 102

Financial Statements
2012
97
Income tax
Income tax (income or expense) includes the current tax expense (or income) and deferred tax
expense (income).Tax is recognized in profit or loss, unless it relates to items that are recognized
directly in other comprehensive income, in which case it is recognized in other comprehensive income.
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 the 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 profit nor taxable profit, and temporary
differences linked to subsidiaries 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 recognized where it is likely that the Group will have future taxable income
against which the asset may be utilized. Deferred tax assets are reduced to the extent that it is no
longer likely that sufficient taxable income will be available.
The impact of possible changes in tax rates on previously recorded deferred tax is recognized in profit
or loss except where it relates to an item recognized in other comprehensive income.
Deferred tax is shown in the balance sheet separately from current tax assets and liabilities and is
classified as a non-current item.
Deferred tax relating to tax loss carryforwards is capitalized when it is likely that it will be utilized within
a reasonable timeframe, assessed on the basis of tax forecasts.
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 shares.
Diluted earnings per share
Diluted earnings per share are equal to:
- Net income before dilution, plus the after-tax amount of any savings in financial expenses
resulting from the conversion of the diluting instruments, divided by
- The weighted average number of ordinary shares in circulation, minus treasury shares, 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 organizational 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.