ITF

56 I ITF FINANCIAL STATEMENTS INTERNATIONAL TENNIS FEDERATION • ANNUAL REPORT AND ACCOUNTS 2015 5. Summary of signifi cant accounting policies (continued) j) Taxation The charge for taxation is based on the result for the year and irrecoverable withholding tax, and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting 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 profi ts from which the future reversal of the underlying timing differences can be deducted. k) Impairment of fi nancial assets In relation to trade receivables, a provision for impairment is made when there is objective evidence, such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor, that the ITF will not be able to collect all of the amounts due under the original terms of the invoice. The carrying amount of the receivable is reduced through use of an allowance account. Impaired debts are derecognised when they are assessed as uncollectable. In addition to this, the ITF fully provides for all debts more than one year overdue, except where those older debts are specifi cally considered to be recoverable. l) Operating leases Leases where the lessor retains substantially all the risks and benefi ts of ownership of the asset are classifi ed as operating leases. Operating lease payments are recognised as an expense in the income and expenditure statement on a straight line basis over the lease term. m) Cash & 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 purpose of the consolidated cash fl ow statement, cash and cash equivalents are net of any outstanding bank overdraft. n) Derivative fi nancial instruments & hedging The Group uses derivative fi nancial instruments such as forward currency contracts to hedge its risks associated with foreign currency fl uctuations. Such derivative fi nancial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profi les. For the purpose of hedge accounting, hedges are classifi ed as: • Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised fi rm commitment (except for foreign currency risk); or • Cash fl ow hedges when hedging exposure to variability in cash fl ows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probably forecast transaction or the foreign currency risk in an unrecognised fi rm commitment; or • Hedges of a net investment in a foreign operation. Notes (forming part of the fi nancial statements)

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