(All amounts in Sri Lanka Rupees millions) |
Deferred income taxes are calculated on all temporary
differences under the liability method using a principal tax
rate of 30% (2002 - 35%).
The movement in the deferred income tax account is as follows:
|
|
|
Group |
Company |
|
2003 |
2002 |
2003 |
2002 |
|
At beginning of year |
|
|
|
|
- as previously reported |
7,146 |
(5,225) |
7,146 |
(5,225) |
- prior year adjustment |
– |
9,849 |
– |
9,849 |
- as restated |
---------
7,146 |
---------
4,624 |
---------
7,146 |
---------
4,624 |
Income Statement charge (Note
6) |
993 |
2,522 |
993 |
2,522 |
At end of year |
---------
8,139
====== |
---------
7,146
====== |
---------
8,139
====== |
---------
7,146
====== |
The prior year adjustment represents a reversal
of deferred tax assets arising on Investment Tax Allowances
which had been previously recognised in the Balance Sheet, having
been reversed due to the Government policy change, which resulted
in the final year for unabsorbed Investment Tax Allowance being
up to 2004/2005. The prior year adjustment, though a departure
from Sri Lanka Accounting Standard SLAS 10 - Net Profit or Loss
for the period, Fundamental Errors and Changes in Accounting
Policies, has been adopted in accordance with the provisions
of SLAS 3 - Presentation of Financial Statements.
Reversal of the entire amount of deferred tax asset in the current
year will lead to a net loss of Rs. 7,466,000,000 which
would be misleading and therefore the departure from the requirement
of SLAS 10 becomes necessary to achieve a fair presentation
as permitted by SLAS 3 - Presentation of Financial Statements.
Therefore a prior year adjustment was considered necessary to
achieve a fair presentation.
The amounts shown in the Balance Sheet represent the following:
|
|
|
Group |
Company |
|
2003 |
2002 |
2003 |
2002 |
|
Deferred tax asset |
(2,332) |
(4,424) |
(2,332) |
(4,424) |
Deferred tax liability |
10,471 |
11,570 |
10,471 |
11,570 |
|
---------
8,139
====== |
---------
7,146
====== |
---------
8,139
====== |
---------
7,146
====== |
|
|
|