Investor Presentaiton

136 Notes to the Consolidated Financial Statements RECOGNISED OPENING BALANCE $M RECOGNISED IN PROFIT OR LOSS IN OTHER COMPREHENSIVE ACQUISITIONS CLOSING $M INCOME $M AND OTHER BALANCE $M $M Deferred tax balances recognised in the Consolidated Statement of Financial Position 3.11 Income taxes (continued) 3.11.3 3.11 Income taxes (continued) Assets and liabilities 3 137 Annual Report 2023 Woolworths Group 1 highlights Performance 2 3.11.4 Tax consolidation The Company and its wholly-owned Australian resident entities formed a tax consolidated group with effect from 1 July 2002. Woolworths Group Limited is the head entity of the tax consolidated group and has assumed the current tax liabilities ofthe members in the tax consolidated group (the Woolworths tax group). Income tax expense or benefit, deferred tax assets, and deferred tax liabilities arising from temporary differences of the members of the tax consolidated group are recognised by each subsidiary where the subsidiary would have been able to recognise the deferred tax asset or deferred tax liability on a standalone basis. The members of the tax consolidated group have entered into a tax funding agreement with the Company which sets out the funding obligations in respect of income tax amounts. The agreement requires payments by the subsidiary to the Company equal to the income tax liability assumed by the Company. The Company is required to make payment to the subsidiary equal to the current tax asset assumed by the Company. In respect of carried forward tax losses brought into the group on consolidation by subsidiary members, the Company will pay the subsidiary member for such losses when these losses are transferred to the tax consolidated group, where the subsidiary member would have been entitled to recognise the benefit of these losses on astandalone basis. Income tax expense of $173 million (2022: $163 million) was charged by the Company to subsidiaries during the period through at call intercompany accounts. Property, plant and equipment 170 Revenue and capital losses 282 Lease liabilities 3,706 Provisions, accruals, and other liabilities 833 Cash flow and fair value hedges 13 Total deferred tax assets 5,004 Deferred tax liabilities Intangible assets Unrealised exchange differences Lease assets (175) (74) (3,099) Investments accounted for using the equity method Prepayments (278) (2) $ ང་སླའ་་གག8་ལྷ (4) 231 (77) 9 214 (64) 13 3,655 1 4 863 (3) 34 - (54) 35 22 44 5,007 (28) (189) (72) (13) (3,020) (195) (4) (6) Other Total deferred tax liabilities Net deferred tax asset/(liability) (39) (3,667) (8) 1 (1) (47) 180 - (42) (3,529) 1,337 126 35 (20) 1,478 2023 Deferred tax assets review Business 3 Directors' Report 4 Report Financial LO Other information 2022 Deferred tax assets Intangible assets OPENING BALANCE RECOGNISED IN PROFIT OR LOSS $M $M RECOGNISED IN OTHER COMPREHENSIVE ACQUISITIONS CLOSING INCOME $M AND OTHER BALANCE $M $M 63 Property, plant and equipment 85 89 (4) 170 Revenue and capital losses 282 282 Lease liabilities 3,571 135 3,706 Provisions, accruals, and other liabilities 789 26 18 833 Cash flow and fair value hedges 5 49 (41) 13 Total deferred tax assets 4,450 581 (41) 14 5,004 Deferred tax liabilities (122) 10 (63) (175) Unrealised exchange differences (29) (50) Lease assets (2,883) (216) (74) (3,099) Investments accounted for using the equity method (278) (278) Prepayments (5) 3 (2) Other (40) 5 (2) (2) (39) (3,079) 1,371 (526) 3 (65) (3,667) 55 (38) (51) 1,337 Total deferred tax liabilities Net deferred tax asset/(liability) UNRECOGNISED DEFERRED TAX ASSETS 151 At the reporting date, the Group has unused capital losses of $166 million (2022: $203 million) available for offset against future capital gains. A deferred tax asset has not been recognised in association with these capital losses as it is not probable that there will be sufficient capital gains available against which these capital losses can be utilised inthe foreseeable future. At the reporting date, there were no unused revenue losses (2022: $65 million) as a result of the exit of the Summergate business during the period. Significant Accounting Policies Income tax expense in the Consolidated Statement of Profit or Loss for the period presented comprises current and deferred tax. Income tax is recognised in the Consolidated Statement of Profit or Loss except to the extent that it relates to items recognised in other comprehensive income, or directly in equity, in which case the tax is also recognised in other comprehensive income, or directly in equity, respectively. Current tax Current tax payable represents the amount expected to be paid to taxation authorities on taxable income for the period, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous periods. Deferred tax Deferred tax is calculated using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting and taxation purposes. Deferred tax is measured at the rates that are expected to apply in the period in which the liability is settled, or asset realised, based on tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit or in relation to the initial recognition of goodwill. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences or unused tax losses and tax offsets can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. The benefits of intangible assets with indefinite useful lives will flow to the Group on an annual basis, therefore the carrying amount will be recovered through use.

View entire presentation