ACCOUNTING Policies â€“
for the year ended June 2006 continued
flow statement, cash and cash equivalents comprise cash-
Deferred tax is provided in full, using the liability method, at currently
on-hand, deposits held on call with banks, other highly liquid
enacted or substantively enacted tax rates in operation at the
investments with original maturities of three months or less and
year-end, that are expected to apply when the related deferred tax
bank overdrafts which form an integral part of the entityâ€™s cash
asset is realised or the deferred tax liability is settled. Full provision
management. Bank overdrafts are shown within borrowings in
is made for all temporary differences between the tax base of an
current liabilities on the balance sheet.
asset or liability and its balance sheet carrying amount. SHARE CAPITAL AND SHARE PREMIUM No deferred tax liability is recognised in those circumstances,
Ordinary shares are classified as equity. Incremental external
other than a business combination, where the initial recognition
costs directly attributable to the issue of new shares are
of an asset or liability has no impact on accounting profit or
deducted from share premium.
taxable income. TREASURY SHARES Deferred tax assets are recognised to the extent that it is
Equity shares in Aspen held by any Group company are classified
probable that future taxable profit will be available against which
as treasury shares. These shares are treated as a deduction
the temporary differences can be utilised.
from the issued and weighted average number of shares. The consideration paid, including any directly attributable incremental
Current tax and deferred tax is charged or credited directly to
costs (net of income taxes), is deducted from Group equity until
equity if the tax relates to items that are credited or charged, in
the shares are cancelled, reissued or disposed of. When such
the same or a different period, directly to equity.
shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction
Deferred tax is provided on temporary differences arising on
costs and the related income tax effects, is included in equity
investments in subsidiaries and associates, except where the
attributable to Aspenâ€™s equity holders. Distributions received on
timing of the reversal of the temporary difference is controlled
treasury shares are eliminated on consolidation.
by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
CONVERTIBLE CUMULATIVE VARIABLE RATE PREFERENCE SHARES
Dividend taxes, including STC
Where financial instruments are issued that contain both
Dividend taxes are recognised as a part of the income tax
liability and equity elements, their component parts are
charge in the income statement in the same period as the
classified separately as liabilities or equity on initial recognition,
in accordance with the substance of the contractual arrangements.
The dividend tax effect of dividends paid on equity instruments is recognised in the period in which the Group declares the
For purposes of balance sheet presentation, such instruments
dividend. For financial instruments that are classified as liabilities,
comprise two components: a financial liability (a contractual
the dividend tax relating to any contractual payments is accrued
arrangement to deliver cash or other financial assets) and an
in the same period as the interest accrual.
equity instrument (a call option granting the holder the right, for a specified period of time, to convert into Aspen ordinary
Deferred tax assets are recognised for dividend tax credits to
shares). Accordingly, such liability and equity elements are
the extent that it is probable that dividends will be declared
presented separately on the balance sheet.
against which unused dividend tax credits can be utilised. The sum of the carrying amounts assigned to the liability and CASH AND CASH EQUIVALENTS
equity components on initial recognition equals the fair value
Cash and cash equivalents are carried in the balance sheet at
ascribed to the instrument as a whole. No gain or loss arises
cost. For the purposes of the balance sheet, cash and cash
from recognising and presenting the components of the
equivalents comprise cash-on-hand, deposits held on call
instrument separately. The liability component is measured by
with banks, and other highly liquid investments with original
discounting the stream of future cash flows at the prevailing
maturities of three months or less. For the purposes of the cash
market rate for a similar liability that does not have an
Aspen Annual Report 2006