(u) Income tax
Income tax comprises current and deferred tax. Current tax and deferred tax are recognised in the income
statement except to the extent that it relates to items recognised directly to equity, in which case it is recognised
in equity or in other comprehensive income.
Current tax is the expected income tax payable or receivable in respect of taxable profit or loss for the year,
using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to income tax
payable in respect of profits of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their tax bases.
Deferred tax assets and liabilities are not recognised for the following temporary differences: (i) the initial
recognition of goodwill, (ii) the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss, (iii) differences relating to
investments in subsidiaries, joint ventures and associates resulting from translation of foreign operations and
(iv) differences relating to investments in subsidiaries and joint ventures to the extent that the Company is able
to control the timing of the reversal of the temporary difference and they will probably not reverse in the
Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred
tax liability is settled.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
a d assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
d ferent taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to
alise the assets and settle the liabilities simultaneously.
A leferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to
ti e extent that it is probable that future taxable profits will be available against which they can be utilised.
D ferred tax assets are reviewed at each balance sheet date and are reduced to the extent that it is no longer
p obable that the related tax benefit will be realised.
D ferred tax assets are recognised in respect of the carry forward of unused tax losses and tax credits. When
a entity has a history of recent losses, the entity recognises a deferred tax asset arising from unused tax losses
o tax credits only to the extent that the entity has sufficient taxable temporary differences or there is
c ivincing other evidence that sufficient taxable profit will be available against which the unused tax losses
o unused tax credits can be utilised by the entity.
Annual Report 2009 - Heineken N.V.