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FBL and Goodman Fielder detail budget consequences

Fuseworks Media
Fuseworks Media

Wellington, June 24 NZPA - Fletcher Building Ltd, Goodman Fielder Ltd, and Metlifecare 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. Metlifecare said its deferred tax liability will be in the vicinity of $45m.

The statements follow other disclosures by The Warehouse, SkyCity 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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