ITF

21 Deferred tax is recognised, without discoun ng, in respect of all ming differences between the treatment of certain items for taxa on and accoun ng purposes which have arisen but not reversed by the balance sheet date, to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying ming differences can be deducted. m) Leases The ITF con nues to occupy its premises at Roehampton under a tenancy at will agreement pending a new lease currently in nego a on with the landlord. Payments under this agreement are expenses monthly as incurred. n) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity date of three months or less. For the consolidated cash flow statement, cash and cash equivalents are net of outstanding bank overdra s. o) Deriva ve financial instruments and hedging The group uses forward currency contract deriva ve financial instruments to hedge its risks associated with foreign currency fluctua ons. Such deriva ve financial instruments are ini ally recognised at fair value on the date at which a deriva ve contract is entered into and are subsequently restated at fair value. Deriva ves are carried as assets when the fair value is posi ve and as liabili es when the fair value is nega ve. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. For the purpose of hedge accoun ng, hedges u lised by the ITF are classified as cash flow hedges. Cash flow hedges are when hedging exposure to variability in cash flows that is either a ributable to a par cular risk associated with a recognised asset or liability, or a highly probable forecast transac on, or the foreign currency risk in an unrecognised firm commitment. At the incep on of a hedge rela onship, the group documents the economic rela onship between hedging instruments and hedged items including whether changes in the cash flow of the hedging instruments are expected to offset changes in the cash flows of hedged items. The group documents its risk management objec ve and strategy for undertaking its hedge transac ons. The fair values of deriva ve financial instruments designated in hedge rela onships are disclosed in note 37. Movements in the hedging reserve in equity are shown in note 37. The full fair value of a hedging deriva ve is classified as a current asset or liability. The group has hedges which meet the criteria for cash flow hedge accoun ng and are accounted for as follows. The effec ve por on of changes in the fair value of deriva ves that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain or loss rela ng to the ineffec ve por on is recognised immediately in profit or loss. When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accoun ng, any cumula ve deferred gain or loss in equity at that me remains in equity un l the forecast transac on occurs. When the forecast transac on is no longer expected to occur, the cumula ve gain or loss and deferred costs of hedging that were reported in equity are reclassified to profit or loss. 6. Significant accoun ng judgements, es mates and assump ons The prepara on of the ITF's financial statements requires management to make judgements, es mates and assump ons that affect the reported amounts of revenues, expenses, assets and liabili es, and the disclosure of con ngent liabili es, at the repor ng date. Significant judgements include the judgements taken in connec on with the accoun ng for the Billie Jean King Cup Ltd joint venture as set out in note 26, and the judgements in respect of the Kosmos case as set out in note 39. Significant es mates have been used to value the IP transferred to the joint venture, which in turn impacts the carrying value of investment in joint ventures and the realised profit on transfer of IP, as set out in note 26. ITF Annual Report and Financial Statements 2023

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