Minerva Equity Limited - 31 March 2019 Final 19.08.2019 - Flipbook - Page 33
Minerva Equity Limited (formerly DMWSL 881 Limited)
Notes to the financial statements
for the period ended 31 March 2019 (continued)
3 Summary of significant accounting policies (continued)
Taxation
Taxation expense for the period comprises current and deferred tax recognised in the reporting
period. Tax is recognised in the profit and loss account, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case tax is also recognised in
other comprehensive or directly in equity respectively.
Current or deferred taxation assets and liabilities are not discounted.
Current tax
Current tax is the amount of income tax payable in respect of the taxable profit for the period. Tax is
calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the
period end.
Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on
the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred tax arises from timing differences that are differences between taxable profits and total
comprehensive income as stated in the financial statements. These timing differences arise from the
inclusion of income and expenses in tax assessments in periods different from those in which they
are recognised in financial statements.
Deferred tax is recognised on all timing differences at the reporting date except for certain
exceptions.
Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they
will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted
by the period end and that are expected to apply to the reversal of the timing difference.
Business combinations and goodwill
Business combinations are accounted for by applying the purchase method.
The cost of a business combination is the fair value of the consideration given, liabilities incurred or
assumed and of equity instruments issued plus the costs directly attributable to the business
combination.
On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and
contingent liabilities unless the fair value cannot be measured reliably, in which case the value is
incorporated in goodwill. Where the fair value of contingent liabilities cannot be reliably measured,
they are disclosed on the same basis as other contingent liabilities.
Goodwill recognised represents the excess of the fair value and directly attributable costs of the
purchase consideration over the fair values to the Group’s interest in the identifiable net assets,
liabilities and contingent liabilities acquired.
On acquisition, goodwill is allocated to cash-generating units that are expected to benefit from the
combination.
Goodwill is amortised over its expected useful life, which is estimated to be ten years. Goodwill is
assessed for impairment when there are indicators of impairment and any impairment is charged to
the income statement. No reversals of impairment are recognised.
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