ANNUAL REPORT 2011 - DONG Energy

Deferred tax is measured using the balance sheet liability
method, providing for all temporary differences between the
carrying amounts and the tax base of assets and liabilities.
However, deferred tax on temporary differences is not provided
for in respect of goodwill not deductible for tax purposes, office
properties and other items - apart from business combinations
- where temporary differences have arisen at the acquisition
date without having any effect on either profit/loss or taxable
income. Where different tax rules can be applied to determine
the tax base, deferred tax is measured on the basis of management’s
planned use of the asset or settlement of the liability
respectively.
Deferred tax assets, including the tax base of tax loss carryforwards,
are recognised as other non-current assets at the value
at which they are expected to be utilised either by elimination
against tax on future earnings or by set-off against deferred tax
liabilities within the same legal tax entity and jurisdiction.
Deferred tax assets and deferred tax liabilities are offset if the
enterprise has a legally enforceable right to set off current
tax assets and current tax liabilities or intends either to settle
on a net basis or to realise the asset and settle the liability
simultaneously.
Adjustment of deferred tax is made relating to eliminations of
unrealised intragroup profits and losses.
Deferred tax is measured in accordance with the tax rules and
tax rates in the respective countries that will apply under the
legislation enacted at the balance sheet date when the deferred
tax is expected to crystallise in the form of current tax. Changes
in deferred tax as a result of changes in tax rates are recognised
in profit for the year.
Deferred tax on temporary differences between the carrying
amounts and the tax base of acquisitions of jointly controlled
assets, including licence interests, is not provided for.
pension obligations
Pension obligations relate to pensions for a few non-insured
former employees (defined benefit plans). The obligation has
been determined using an actuarial calculation. In the case
of defined benefit plans, the present value of future benefits
to be paid under the plan is determined actuarially on an annual
basis. The present value is determined on the basis of
assumptions about future trends in salary levels, interest rates,
inflation, mortality, etc. The present value is determined only
for the benefits to which the employees have earned the right
through service already rendered to the Group. The actuarially
determined present value is recognised in the balance sheet
within pension obligations. The year’s pension costs, including
actuarial gains and losses, are recognised in profit for the year.
The financial consequences of the defined benefit pension
plans entered into by the Group are insignificant.
leasing
Lease commitments are accounted for as commitments under
finance leases and commitments under operating leases
respectively.
A lease is classified as a finance lease if it transfers substantially
all the risks and rewards incidental to ownership of the
leased asset. Other leases are classified as operating leases.
The accounting treatment of assets held under finance leases
and the associated liability are described in the sections on
property, plant and equipment and financial liabilities.
Lease payments under operating leases are recognised in profit
for the year over the term of the lease on a straight-line basis.
assets classified as held for sale
Assets classified as held for sale and the associated liabilities
are presented as separate line items in the balance sheet, and
the principal items are specified in the notes. Comparative figures
in the balance sheet are not restated.
Assets classified as held for sale comprise non-current assets
and disposal groups classified as held for sale. Disposal groups
are groups of assets to be disposed of, by sale or otherwise, together
as a group in a single transaction. Liabilities relating to
assets held for sale are liabilities directly associated with those
assets that will be transferred in the transaction. Assets are
classified as held for sale when their carrying amount will be
recovered principally through a sale transaction within twelve
months under a formal plan rather than through continuing
use.
Assets or disposal groups classified as held for sale are measured
at the lower of carrying amount at the date of classification
as held for sale and fair value less costs to sell. No depreciation
or amortisation is charged on assets from the date they
are classified as held for sale.
Impairment losses arising on initial classification as held for
sale and gains and losses on subsequent measurement at the
lower of carrying amount and fair value less costs to sell are
recognised in profit for the year within the items to which they
relate. Gains and losses are disclosed in the notes.
DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED finanCial statEmEnts
139
notes