Page 50 - RFU Annual Report 2015/2016

Financial Statements
48

Notes to the Financial Statements continued

2. Accounting policies continued Deferred tax balances are not (i) Tangible fixed assets and
recognised in respect of permanent depreciation
(f) Operating leases differences except in respect of Tangible fixed assets are stated
Rentals payable under operating leases business combinations, when deferred at original cost less accumulated
are charged on a straight-line basis tax is recognised on the differences depreciation and any provision
over the term of the lease. between the fair values of assets for impairment in value. Such cost
acquired and the future tax deductions includes costs directly attributable to
(g) Taxation and deferred taxation available for them, and the differences making the asset capable of operating
The tax charge for the year comprises between the fair values of liabilities as intended. In the case of major
current and deferred tax. Tax is acquired and the amount that will stadium work, which has been financed
recognised in the Profit and Loss be assessed for tax. Deferred tax is by borrowing, cost includes related
Account, except that a charge determined using tax rates and laws interest capitalised for the period up to
attributable to an item of income that have been enacted or substantively the completion of the stadium project.
and expense recognised as other enacted by the balance sheet date. Depreciation is provided to write off
comprehensive income, or to an item the cost of the assets on a systematic
recognised directly in equity, is also Deferred tax assets and liabilities are basis over their estimated useful lives
recognised in other comprehensive not discounted. on a straight-line basis as follows:
income, or directly in equity

respectively. (h) Intangible fixed assets and Land and buildings 40-50 years
amortisation
The current income tax charge is Intangible fixed assets are initially Fixtures, fittings 3-40 years
calculated on the basis of tax rates recognised at cost. After recognition, and equipment
and laws that have been enacted, or under the cost model, intangible fixed
substantively enacted, by the Balance assets are measured at cost less any Assets held under over the period
Sheet date in the countries where the accumulated amortisation and any finance leases of the lease
Company and the Group operate and accumulated impairment losses.
generate income. No depreciation is charged on freehold
All intangible fixed assets are land. Depreciation on tangible fixed
considered to have a finite useful life. assets commences when the asset is
Deferred tax balances are recognised If a reliable estimate of the useful life first brought into use. The carrying
in respect of all timing differences that cannot be made, the useful life shall values of tangible fixed assets are
have originated but not reversed by the not exceed five years. Amortisation reviewed for impairment when
Balance Sheet date, except that: is provided to write off the cost of the events or changes in circumstances
intangible fixed assets on a systematic indicate the carrying value may not be
the recognition of deferred tax assets basis over their estimated useful lives recoverable.
is limited to the extent that it is on a straight-line basis as follows:
probable that they will be recovered
against the reversal of deferred tax Computer software 3-5 years
liabilities or other future taxable
profits; Amortisation on assets commences
when the asset is first brought
where they relate to timing differences into use. The carrying values of
in respect of interests in subsidiaries, intangible fixed assets are reviewed for
associates, branches and joint impairment when events or changes
ventures, and the Group can control in circumstances indicate the carrying
the reversal of the timing differences, value may not be recoverable.
and such reversal is not considered
probable in the foreseeable future.

Annual Report 2015/16