This excerpt taken from the ICI 6-K filed Aug 11, 2005.
IFRS restated accounting policies (continued)
Discontinuance of hedge accounting
Fair value hedges
Cash flow hedges
Current tax is the expected tax payable on the taxable income for the year and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for tax on any temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes using tax rates enacted or substantially enacted at the balance sheet date.
No deferred tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, where the Group is able to control the timing on the reversal and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences to the extent that it is probable that taxable profit will be available against which they can be utilised.
Business combinations and goodwill