63
FLEXIGROUP LIMITED FINANCIAL REPORT 2011
6. Income tax expense
Consolidated
2011
2010
$’000
$’000
(a) Income tax expense/(beneft)
Current tax
17,461
13,218
Deferred tax
3,787
3,785
Over provision in prior years
(1,312)
(1,096)
Credit relating to re-setting of tax cost base of assets
(1,906)
(18,400)
18,030
(2,493)
Income tax expense is attributable to:
Proft from continuing operations
18,030
(2,493)
Aggregate income tax (beneft)/expense
18,030
(2,493)
Deferred income tax (revenue) expense included in income tax expense comprises:
Decrease/(increase) in deferred tax assets (note 15)
382
(978)
(Decrease)/increase in deferred tax liabilities (note 23)
3,405
4,763
3,787
3,785
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Proft from continuing operations before income tax
69,790
56,429
Tax at the Australian tax rate of 30%
20,937
16,929
Tax efect of amounts which are not deductible (taxable) in calculating taxable income:
Amortisation of intangibles
258
258
Sundry items
53
(184)
21,248
17,003
(Over)/under provision in prior years
(1,312)
(1,096)
Credit relating to re-setting of tax cost base of assets
(1,906)
(18,400)
18,030
(2,493)
(c) Tax consolidation legislation
FlexiGroup Limited and its wholly-owned Australian controlled entities implemented the tax consolidation legislation
from December 2006. The accounting policy on implementation of the legislation is set out in note 1(g).
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing-
agreement which, in the opinion of the Directors, limits the joint and several liability of the wholly-owned entities in the
case of a default by the head entity, FlexiGroup Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate
FlexiGroup Limited for any current tax payable assumed and are compensated by FlexiGroup Limited for any current tax
receivable and deferred tax assets relating to the unused tax losses or unused tax credits that are transferred to FlexiGroup
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts
recognised in the wholly-owned entities’ fnancial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity which is issued as soon as practicable after the end of the fnancial year. The head entity may also require payment of
interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current
inter-company receivables.