Page 118 - HRC_Annual_Report_2023

116 About HRC Value Creation Management Discussion Leadership
& Analysis

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023

2 SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (continued)
2.21 CURRENT AND DEFERRED INCOME TAX
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities. This liability is measured using the best estimate of the most likely outcome.
Deferred tax assets and liabilities are recognised on temporary differences arising between the amounts attributed to
assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax
rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected
to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets including tax benefits from reinvestment allowance are recognised for all deductible temporary
differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profits
will be available against which the deductible temporary differences and the carry forward of unused tax credits and
unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred and income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax assets and liabilities relate to taxes levied by the same
taxation authority on the taxable entity.
2.22 SHARE CAPITAL
(a) Classification
An equity instrument is any contract that evidence a residual interest in the assets of the Company, after deducting
all of its liabilities. Ordinary shares are classified as equity. Ordinary shares are recorded at the proceeds received,
net of directly attributable incremental transaction costs.
(b) Dividend distribution

Dividend distribution to owners of the Company is debited directly to equity. The corresponding liability is
recognised in the period in which the dividends are approved.