Lendlease Annual Report 2024

118 Lendlease Annual Report 2024 Notes to Consolidated Financial Statements continued 9. Taxation Accounting Policies Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax is recognised in the Income Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Under current Australian income tax law, LLT is not liable for income tax, including capital gains tax, to the extent that unitholders are attributed the taxable income of LLT. Current tax is the expected tax payable on the taxable income for the financial year, using applicable tax rates (and tax laws) at the balance sheet date in each jurisdiction, and any adjustment to tax payable in respect of previous financial years. Deferred tax is the expected tax payable in future periods as a result of past transactions or events and is calculated by comparing the accounting balance sheet to the tax balance sheet. Temporary differences are provided for any differences in the carrying amounts of assets and liabilities between the accounting and tax balance sheets. The following temporary differences are not provided for: • The initial recognition of taxable goodwill • The initial recognition of assets or liabilities that affect neither accounting nor taxable profit • Differences relating to investments in subsidiaries to the extent that they are not likely to reverse in the foreseeable future. Measurement of deferred tax is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using applicable tax rates (and tax laws) at the balance sheet date. Global minimum tax The Company is monitoring the global progress toward the enactment and implementation of new Organisation for Economic Co-Operation and Development rules under Pillar Two. Under the Pillar Two rules, the Group would be liable to pay a top-up tax for jurisdictions where the effective tax rate calculated in accordance with Pillar Two rules falls below the minimum tax rate of 15%. Pillar Two legislation has been passed in certain jurisdictions in which the Group operates. The Group is in scope of the legislation that will be effective in certain jurisdictions for the Group’s financial year beginning 1 July 2024. An assessment of the Group’s potential exposure to Pillar Two income taxes has been performed, based on historical data over several years for the impacted entities in the Group. Based on this assessment, it is not anticipated that there will be a material impact to tax expense for the Group on implementation of Pillar Two. The impact of implementing Pillar Two on future years will continue to be assessed. The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income tax legislation, in accordance with AASB 112 Income Taxes . Recognition of deferred tax assets is only to the extent it is probable that future taxable profits will be available so as the related tax asset will be realised. Deferred tax assets may include the following: • Deductible temporary differences • Unused tax losses • Unused tax credits. Management considers the estimation of future taxable profits to be an area of estimation uncertainty as a change in any of the assumptions used in budgeting and forecasting would have an impact on the future profitability of the Group. The Group prepares financial budgets and forecasts, covering a five year period, which are reviewed on a regular basis. These forecasts and budgets form the basis of future profitability to support the carrying value of the deferred tax assets. The performance of the Group is influenced by a variety of general economic and business conditions, which are outside the control of the Group, including the level of inflation, interest rates, exchange rates, commodity prices, ability to access funding, oversupply and demand conditions and government fiscal, monetary and regulatory policies. Presentation of deferred tax assets and liabilities can be offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but are intended to be settled on a net basis or to be realised simultaneously. Tax Consolidation The Company is the head entity of the Australian Tax Consolidated Group comprising all the Australian wholly owned subsidiaries, excluding LLT. As a consequence, all members of the Australian Tax Consolidation Group are taxed as a single entity. Section A. Performance continued

RkJQdWJsaXNoZXIy NjM4NDM=