ITF

NOTES (CONT.) (FORMING PART OF THE FINANCIAL STATEMENTS) 22. Taxation (continued) Reconciliation of effective tax rate 2020 2019 $000 $000 (Deficit) / surplus for the year (6,928) 5,893 Total tax (credit) / charge (626) 724 (Deficit) / surplus excluding taxation (7,554) 6,617 Tax using Bahamas corporation tax rate of 0% (2019: 0%) - - Effect of tax rate in Australia - 721 Withholding tax charge 38 - Effect of tax rate in UK (441) 3 Effect of prior year adjustments in UK (223) - Total tax (credit) / charge (626) 724 23. Intangible assets Internally generated Internally generated Total software software (under construction) $000 $000 $000 Cost 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 Balance at 1 January 2020 4,128 282 4,410 Additions 1,778 84 1,862 Balance at 31 December 2020 5,906 366 6,272 Accumulated amortisation Balance at 1 January 2019 246 - 246 Charge for the year 948 - 948 Balance at 31 December 2019 1,194 - 1,194 Balance at 1 January 2020 1,194 - 1,194 Charge for the year 1,703 - 1,703 Balance at 31 December 2020 2,897 - 2,897 Net book value at 31 December 2018 1,489 144 1,633 at 31 December 2019 2,934 282 3,216 at 31 December 2020 3,009 366 3,375 b) There is a deferred tax asset of $2,068,000 (2019: $899,000) 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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