![Show Menu](styles/mobile-menu.png)
![Page Background](./../common/page-substrates/page0104.png)
value where there is a reasonable assurance
that the grant will be received and the Group
will comply with all attached conditions.
Where the grants have attached conditions
and/or are project specific, they are
recognised at their fair value and initially
credited to deferred income upon receipt,
then recognised in the consolidated income
statement over the period necessary to match
them with the costs that they are intended
to compensate. Where those grants relate to
expenditure that is to be capitalised, they are
credited to the consolidated income statement
on a straight line basis over the expected
lives of the related assets from the date of
commissioning. Grants that compensate the
Group for expenses incurred are recognised in
the income statement on a systematic basis in
the periods in which expenses are recognised
e.g. Inland Rail Project.
(j) Infrastructure maintenance
Infrastructure maintenance of infrastructure
assets is classified as major periodic
maintenance if it is part of a systematic
planned program of works, occurs on a
cyclical basis and is significant in monetary
value. Major periodic maintenance may include
significant corrective works, component
replacement programs, and similar activities
and these costs are expensed.
(k) Income tax
Current tax assets and liabilities for the
current and prior periods are measured
at the amount expected to be recovered
from or paid to the taxation authorities based
on the current period’s taxable income and
any adjustments in respect of prior years.
The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted by the reporting date.
Deferred tax liabilities (DTLs) are recognised
for all taxable temporary differences between
the carrying amount of assets and liabilities for
financial reporting and the amounts used
for taxation purposes.
Deferred tax assets (DTAs) are recognised
for all deductible temporary differences, carry
forward of unused tax offsets and unused tax
losses, to the extent that it is probable that
taxable profit will be available against which
the deductible temporary differences and the
unused tax offsets and losses can be utilised.
Division 58 of the Income Tax Assessment Act
1997 (“Division 58”), has entitled the Group
to value certain assets, for taxation purposes,
using pre-existing audited book values or the
notional written down values of the assets as
appropriate. This effectively means the tax
depreciable value of these rail infrastructure
and related assets significantly exceeds the
carrying value. Accordingly, Division 58 results
in significant deductible temporary differences
and potential DTAs. The carrying amount of
DTAs is reviewed at each reporting date and
adjusted to the extent that it is probable that
sufficient taxable profit will be available to
allow the deferred tax asset to be utilised.
DTAs and DTLs are measured at the tax rates
that are expected to apply in the year when
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. DTAs and DTLs are offset only
if a legally enforceable right exists to set off
current tax assets against current tax liabilities
and the DTAs and DTLs relate to the same
taxable entity and the same taxation authority.
Tax consolidation legislation
Australian Rail Track Corporation Ltd and its
wholly owned Australian controlled entities
consolidated for income tax purposes as
of 1 July 2003.
The head entity, Australian Rail Track
Corporation Ltd and the controlled entities
in the income tax consolidated group continue
to account for their own current and deferred
tax amounts. The Group has applied the
NOTE 21 (CONTINUED)
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
102