Current tax represents the amount of tax payable in respect of the taxable profit for the current reporting period. It is measured at the amount expected to be paid using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current period. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences.
2.5. Financial instruments
The company uses only basic financial instruments. Debtors and creditors are valued at transaction cost.