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F&P Healthcare details budget consequences

Fuseworks Media
Fuseworks Media

Wellington, June 25 NZPA - Fisher & Paykel Healthcare Ltd said an increase in its deferred tax liability will decrease its net profit after tax by an estimated $11 million in the year ending March 31, 2011.

Fletcher Building Ltd and Goodman Fielder Ltd yesterday 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. SkyCity provided advice on Tuesday and several property companies have also disclosed expected deferred tax liabilities.

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 writedown 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 say 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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