Fletcher Building Ltd and Goodman Fielder Ltd today detailed
the size of accounting items resulting from tax policy
changes in the Government's budget that will run through
their profit and loss statements.
Fletcher Building said it will incur an unusual provision for
deferred tax of $30 million in the year to June 30. Goodman
Fielder said it will have a write down in deferred tax assets
of $16m.
The statements follow other disclosures by The Warehouse and
property trusts and more are expected to be announced.
The Government reduced the corporate tax rate to 28 percent
from 30 percent and removed depreciation on buildings for tax
purposes.
Accountants says the depreciation change creates a
discrepancy between the accounting value and the value of a
building for tax purposes and this is recognised as a
deferred tax liability.
All the affected companies are saying the deferred tax
liabilities are one-off accounting entries that are non-cash
and will not affect underlying profitability or dividend
payout.
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