ITF

NOTES (CONT.) (FORMING PART OF THE FINANCIAL STATEMENTS) 22. Taxation (continued) Reconciliation of effective tax rate 2019 2018 $000 $000 Surplus / (deficit) for the year 5,893 (5,489) Total tax expense 724 109 Surplus / (deficit) excluding taxation 6,617 (5,380) Tax using Bahamas corporation tax rate of 0% (2018: 0%) - - Effect of tax rate in Australia 721 97 Withholding tax charge - 12 Effect of tax rate in UK 3 - Total tax expense 724 109 23. Intangible assets Internally generated Internally generated Total software software (under construction) $000 $000 $000 Cost Balance at 1 January 2018 - - - Additions 1,735 144 1,879 Balance at 31 December 2018 1,735 144 1,879 Balance at 1 January 2019 1,735 144 1,879 Additions 2,393 138 2,531 Balance at 31 December 2019 4,128 282 4,410 Amortisation Balance at 1 January 2018 - - - Charge for the period 246 - 246 Balance at 31 December 2018 246 - 246 Balance at 1 January 2019 246 - 246 Charge for the period 948 - 948 Balance at 31 December 2019 1,194 - 1,194 Net book value at 1 January 2018 - - - at 31 December 2018 1,489 144 1,633 at 31 December 2019 2,934 282 3,216 b) There is a deferred tax asset of $899,000 (2018: $1,012,000) in respect of brought forward tax losses and decelerated capital allowances which has not been recognised in the balance sheet since the ability to use it against future profits is not considered probable. Software under construction consists of capitalised development costs being an internally generated intangible asset. Specifically this relates to the development of an online coaching academy which will offer certified tennis coaching courses. Amortisation will be charged when the asset is substantially ready for use. Other internally generated software relates to the investment in the ITF's IPIN system and website development costs as well as other software development including capitalised IT staff costs. 24

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