Consolidated Financial Statements >
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
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| 2012 annual report prysmian group
B.21 COST RECOGNITION
B.22 TAXATION
Costs are recognised when they relate to assets and services acquired or consumed during the year or to make a systematic
allocation to match costs with revenues.
Current taxes are calculated on the basis of the taxable income
for the year, applying the tax rates effective at the end of the
reporting period.
Deferred taxes are calculated on all the differences emerging
between the taxable base of an asset or liability and the
related carrying amount, except for goodwill and those
differences arising from investments in subsidiaries, where
the timing of the reversal of such differences is controlled
by the Group and it is likely that they will not reverse in a
reasonably foreseeable future. Deferred tax assets, including
those relating to past tax losses, not offset by deferred tax
liabilities, are recognised to the extent that it is likely that
future taxable profit will be available against which they can
be recovered. Deferred taxes are determined using tax rates
that are expected to apply in the years when the differences
are realised or extinguished, on the basis of tax rates that
have been enacted or substantively enacted by the end of the
reporting period.
Current and deferred taxes are recognised in the income
statement with the exception of those relating to items
recognised directly in equity; such taxes are also accounted for
directly in equity. Income taxes are offset if they are levied by
the same taxation authority, if there is a legal entitlement to
offset them and if the net balance is expected to be settled.
Other taxes not related to income, such as property tax, are
reported in “Other expenses”.
B.20 GOVERNMENT GRANTS
Government grants are recognised on an accrual basis in
direct relation to the costs incurred when there is a formal
resolution approving the allocation and, when the right to the
grant is assured since it is reasonably certain that the Group
will comply with the conditions attaching to its receipt and
that the grant will be received.
(a) Grants related to assets
Government grants relating to investments in property, plant
and equipment are recorded as deferred income in “Other
payables”, classified under current and non-current liabilities
for the respective long-term and short-term portion of such
grants. Deferred income is recognised in “Other income” in
the income statement on a straight-line basis over the useful
life of the asset to which the grant refers.
(b) Grants related to income
Grants other than those related to assets are credited to the
income statement as “Other income”.
