FFIINANNANCCIALIAL S STTAATTEEMMEENNTTSS NOTES TO THE FINANCIAL STATEMENTS CONTINUED S 2 ACCOUNTING POLICIES CONTINUED Equity instruments TR Provisions continued An equity instrument is any contract that evidences a residual interest in A Restructuring provisions are recognised only when the Group has a the assets of the Group after deducting all of its liabilities. Equity TE G I constructive obligation, which is when: instruments issued by the Group are recorded at the proceeds received, C net of direct issue costs. Dividends and distributions relating to equity R – there is a detailed formal plan that identifies the business or part of the E instruments are debited direct to equity. P business concerned, the location and number of employees affected, O R the detailed estimate of the associated costs, and the timeline; and Adjusting items T – the employees affected have been notified of the plan’s main features. An adjusting item is disclosed separately in the Consolidated Statement of Comprehensive Income where the quantum, nature or volatility of such Income taxes G items would otherwise distort the underlying trading performance of the O Tax on the profit or loss for the period represents the sum of the tax Group, including where they are not expected to repeat in future periods. VE currently payable and deferred tax. Tax is recognised in the Income The tax effect is also included. R Statement except to the extent that it relates to items recognised directly NAN in equity or Other Comprehensive Income whereby the tax treatment Details in respect of adjusting items recognised in the current and prior C follows that of the underlying item. year are set out in note 5. E Current tax assets and liabilities are measured at the amount expected to Critical accounting assumptions and key sources of estimation be recovered from or paid to the taxation authorities, based on tax rates uncertainty estimates F I and laws that are enacted or substantively enacted by the reporting date. The preparation of Financial Statements requires management to make NAN estimates and assumptions that affect the amounts reported for assets C The Group is subject to corporate taxes in a number of different and liabilities as at the reporting date and the amounts reported for IAL jurisdictions and judgement is required in determining the appropriate revenues and expenses during the period. The nature of estimation means S provision for transactions where the ultimate tax determination is that actual outcomes could differ from those estimates. T A uncertain. In such circumstances, the Group recognises liabilities for T E anticipated taxes based on the best information available and where the In the process of applying the Group’s accounting policies, which are M E anticipated liability is both probable and can be estimated. Any interest described in this note, management have made estimates. Other than N T and penalties accrued, if applicable, are included in income taxes in both as set out below, variations in the remaining estimates are not considered S the Consolidated Income Statement and the Consolidated Statement of to give rise to a significant risk of a material adjustment to the carrying Financial Position. Where the final outcome of such matters differs from the amounts of assets and liabilities within the next financial year. The Group F amount recorded, any differences may impact the income tax and deferred considers it appropriate to identify the nature of the estimates used in U R tax provisions in the period in which the final determination is made. preparing the Group Financial Statements and the main sources T H of estimation uncertainty are: E Deferred tax is recognised on all temporary differences arising between R the tax bases of assets and liabilities and their carrying amounts in the – impairment of finite life intangible assets; and INF Financial Statements, with the following exceptions: – the recognition of deferred tax assets OR M – Where the temporary difference arises from the initial recognition of Impairment of finite life intangible assets A T goodwill or of an asset or liability in a transaction that is not a business For intangible assets that have a finite life, the recoverable amount I combination that at the time of the transaction affects neither is estimated when there is an indication that the asset is impaired. ON accounting nor taxable profit or loss. The result of the calculation of the value-in-use is sensitive to the – In respect of taxable temporary differences associated with assumptions made and is a subjective estimate (note 13). investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the Recognition of deferred tax assets temporary differences will not reverse in the foreseeable future. Deferred tax assets are first recognised against deferred tax liabilities – Deferred income tax assets are recognised only to the extent that it is relating to the same taxation authority and the same taxable company probable that taxable profit will be available against which the which are expected to reverse in the same period. deductible temporary differences, carried forward tax credits or tax Net deferred tax assets remaining are then only recognised to the extent losses can be utilised. that it is probable that sufficient future taxable profits will be available Deferred tax assets and liabilities are measured on an undiscounted basis against which the deductible temporary difference or unused tax losses at the tax rates that are expected to apply when the related asset is or credits can be recovered or utilised. The Group reviews the same realised or liability is settled. Deferred tax assets and liabilities are underlying assumptions and future forecasts used for impairment testing, disclosed on a net basis where a right of offset exists. going concern and viability assessments to evaluate the level of The Group applied the exception under IAS 12 to recognising and estimated future taxable profits and the associated level of net deferred disclosing information about deferred tax assets and liabilities related to tax assets which are supportable for recognition at the reporting date. Pillar Two income taxes. In considering recoverability of the deferred tax assets, the Group relies upon future forecasts, which inherently increases the level of significant estimation uncertainty in the later periods. Note 9 provides information on the inherent sensitivities. ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2023 154