Notes to the consolidated financial statements 30 June 2022 (continued) 5 Income tax (continued) (e) Deferred tax assets and liabilities Balance Sheet Profit or loss Equity 2022 $M 2021 $M 2022 $M 2021 $M 2022 $M 2021 $M Deferred tax assets Property, plant and equipment - 0.2 0.2 (0.2) - - Trade receivables 2.1 - (2.1) - - - Business-related capital allowances 3.7 4.5 0.8 2.0 - (5.0) Provision for employee entitlements 4.4 3.4 (1.0) (0.7) - - Provision for rehabilitation 11.3 13.4 2.1 6.6 - - Borrowing costs - 4.2 4.2 (4.2) - - Leased assets 0.2 0.1 (0.1) 0.1 - - Carry forward tax losses - 0.3 0.3 91.4 - - Other 4.9 4.6 (0.3) (1.0) - - Gross deferred tax assets 26.6 30.7 4.1 94.0 - (5.0) Deferred tax liabilities Capitalised exploration expenditure (8.7) (6.3) 2.4 1.4 - - Mine properties (65.1) (82.4) (17.3) (39.6) - - Property, plant and equipment (0.1) - 0.1 (0.8) - - Deferred gains and losses on hedging contracts (14.7) (0.8) 11.2 - 2.7 0.7 Trade receivables - (6.0) (6.0) 1.7 - - Consumable inventories (2.4) (1.8) 0.6 (0.2) - - Financial assets at fair value through profit or loss (13.8) (11.0) 3.4 3.4 (0.6) - Investments in associates (31.8) - 31.8 - - - Other (0.4) (0.2) 0.2 0.2 - - Gross deferred tax liabilities (137.0) (108.5) 26.4 (33.9) 2.1 0.7 Net impact (110.4) (77.8) 30.5 60.1 2.1 (4.3) (f) Tax losses In addition to the above recognised tax losses, the Group also has the following revenue and capital tax losses for which no deferred tax asset has been recognised: 2022 $M 2021 $M Unrecognised revenue tax losses 17.9 24.7 Potential tax benefit @ 30% (2021: 30%) 5.4 7.4 Unrecognised capital tax losses 90.5 90.4 Potential tax benefit @ 30% (2021: 30%) 27.1 27.1 Notes to the consolidated financial statements 30 June 2022 (continued) 5 Income tax (continued) (g) Tax transparency code The Group has adopted the Board of Taxation's voluntary Tax Transparency Code (TTC). The TTC requires additional tax disclosures in two parts (Part A and Part B), which includes addressing the Company's approach to tax strategy and governance. The Group has addressed these Part A and Part B disclosures in this note and in its 2021 Tax Transparency Report. In relation to the year ended 30 June 2022, the Part A and Part B disclosures will be addressed in the Group's 2022 Annual Sustainability Report. (h) Recognition and measurement Current taxes The income tax expense or benefit for the year is the tax payable on the current year's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. 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 in the countries where the Company's subsidiaries and associates operate and generate taxable income. 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. Deferred taxes Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also 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 income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Offsetting deferred tax balances Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. (i) Significant estimates and judgements In addition, deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future forecast taxable profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the relevant tax legislation associated with their recoupment. Notes to the consolidated financial statements 30 June 2022 Notes to the consolidated financial statements 30 June 2022 100 — IGO ANNUAL REPORT 2022 IGO ANNUAL REPORT 2022 — 101
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