Property For Industry Ltd is signalling a $36 million deferred tax liability in its accounts for the six months to June 30.The charge relates to depreciation of building structures, with a corresponding increase in deferred income tax expense. It is a one
Property For Industry Ltd is signalling a $36 million deferred tax liability in its accounts for the six months to June 30.
The charge relates to depreciation of building structures, with a corresponding increase in deferred income tax expense. It is a one-off, non-cash adjustment required under International Financial Reporting Standards and results from the fact that the company will no longer be entitled to claim tax depreciation on its buildings. This adjustment is not a liability payable to Inland Revenue.
The deferred tax adjustment will also not affect the company's distributable profit but will cause a significant unrealised after-tax net loss in the six month period.
Also the net tangible assets per share will reduce from $1.10 per share as at December 31 2009 to 93 cents as at June 30.
A number of companies are disclosing deferred tax liabilities resulting from the decision in the Government's budget to cut depreciation on buildings for tax purposes to zero.
PFI is New Zealand's only listed company specialising in industrial property investment, and is managed by AMP Capital Investors.
