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NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2021 (continued)
1
Statement of Accounting Policies (continued)
Income tax
Income tax in the Consolidated Income
Statement represents the sum of
current income tax and deferred tax not
recognised in other comprehensive income
or directly in equity.
Current tax
Current tax represents the expected tax
payable or recoverable on the taxable
profit for the year using tax rates and laws
that have been enacted, or substantively
enacted, at the reporting date and taking
into account any adjustments from
prior years. Liabilities for uncertain tax
treatments are recognised in accordance
with IFRIC 23 Uncertainty Over Income Tax
Treatments and are measured using either
the most likely amount method or the
expected value method – whichever better
predicts the resolution of the uncertainty.
Deferred Tax
Deferred tax is recognised on all temporary
differences at the reporting date.
Temporary differences are defined as the
difference between the tax bases of assets
and liabilities and their carrying amounts
in the consolidated financial statements.
Deferred tax assets and liabilities are not
subject to discounting and are measured
at the tax rates that are expected to
apply in the period in which the asset is
realised or the liability is settled based
on tax rates and tax laws that have been
enacted or substantively enacted at the
reporting date.
The Group offsets deferred tax assets
and deferred tax liabilities only if it has a
legally enforceable right to set off current
tax assets and current tax liabilities and
the deferred tax assets and deferred tax
liabilities relate to income taxes levied by
the same taxation authority on either the
same taxable entity or different taxable
entities which intend either to settle
current tax liabilities and assets on a net
basis, or to realise the assets and settle
the liabilities simultaneously, in each
future period in which significant amounts
of deferred tax liabilities or assets are
expected to be settled or recovered.
Deferred tax liabilities are recognised for
all taxable temporary differences (i.e.
differences that will result in taxable
amounts in future periods when the
carrying amount of the asset or liability
is recovered or settled).
Deferred tax assets are recognised in
respect of all deductible temporary
differences (i.e. differences that give
rise to amounts which are deductible
in determining taxable profits in future
periods when the carrying amount
of the asset or liability is recovered or
settled), carry-forward of unused tax
credits and unused tax losses to the
extent that it is probable that taxable
profits will be available against which to
offset these items.
The carrying amounts of deferred tax
assets are subject to review at each
reporting date and reduced to the extent
that future taxable profits are considered
to be inadequate to allow all or part of any
deferred tax asset to be utilised.
Changes in deferred tax assets or liabilities
are recognised as a component of tax
income or expense in profit or loss,
except where they relate to items that
are recognised in other comprehensive
income or directly in equity, in which case
the related deferred tax is also recognised
in other comprehensive income or
equity, respectively.
Grants
Grants are initially recognised as deferred
income at their fair value when there is a
reasonable assurance that the grant will
be received, and all relevant conditions
have been complied with.
Capital grants received and receivable in
respect of property, plant and equipment
are treated as a reduction in the cost of
that asset and thereby amortised to the
Consolidated Income Statement in line with
the underlying asset.
Revenue grants are recognised in the
Consolidated Income Statement to offset
the related expenditure.
Investments in subsidiaries
Investments in subsidiaries held by the
Parent Company are carried at cost less
accumulated impairment losses.
Property, Plant and Equipment
Property, plant and equipment is
measured at cost less accumulated
depreciation and accumulated impairment
losses.
Depreciation is provided on a straight line basis at the rates stated below, which are estimated to reduce each item of property, plant
and equipment to its residual value by the end of its useful life:
Freehold buildings
2% - 2.5% on cost
Plant and machinery
5% to 20% on cost
Fixtures and fittings
10% to 20% on cost
Computer equipment
12.5% to 33% on cost
Motor vehicles
10% to 25% on cost
Freehold land is stated at cost and is not depreciated.
Kingspan Group plc Annual Report & Financial Statements 2021
Financial Statements
