19. INCOME TAXES We follow the deferred method of accounting for income taxes whereby current income taxes are recognized for the estimated income taxes payable for the current period. Deferred tax assets and liabilities represent the cumulative amount of tax applicable to temporary differences between the carrying amount of the assets and liabilities, and their values for tax purposes. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates anticipated to apply to taxable income in the years in which those temporary differences are anticipated to be recovered or settled. Changes in deferred taxes related to a change in tax rates are recognized in income in the period of the tax rate change. All deferred tax assets and liabilities are expected to be realized in the normal course of operations.
The provision for income taxes consists of the following:
2023
2022
Consolidated statements of income Current
$
125,171 $
105,678
Deferred
(1,170)
5,939
124,001
111,617
Other comprehensive income Tax expense (recovery) related to:
Items that will be not subsequently reclassified to net income
(365)
(39)
Items that will be subsequently reclassified to net income Debt securities measured at fair value through other comprehensive income
21,342
(27,849)
Derivatives designated as cash flow hedges
(7,902)
(17,014)
13,075
(44,902)
Total
$
137,076 $
66,715
A reconciliation of the statutory tax rates and income tax that would be payable at these rates to the effective income tax rates and provision for income taxes reported in the consolidated statements of income follows: 2023 2022 Combined Canadian federal and provincial income taxes and statutory tax rate $ 121,563 25.6 % $ 111,720 24.9 % Increase (decrease) arising from: Change in tax rate (357) (0.1) 210 - Tax-exempt income - - (60) - Stock-based compensation 317 0.1 347 0.1 Adjustments arising from prior year tax filings 881 0.2 (2,486) (0.6) Other 1,597 0.3 1,886 0.5 Provision for Income Taxes and Effective Tax Rate $ 124,001 26.1 % $ 111,617 24.9 %
Deferred tax balances are comprised of the following:
As at October 31 2023
As at October 31 2022
Deferred Tax Assets Allowance for credit losses
$
20,855 23,339 16,744 16,539
$
20,209 23,297 16,435 14,301
Lease liabilities
Leasing income
Deferred loan fees
Intangible assets
8,677 6,433 4,283
7,936 5,154 3,834 8,699
Employee benefits
Non-capital losses
Other temporary differences
11,630
108,500
99,865
Deferred Tax Liabilities
Property and equipment
38,904 18,218
30,769 18,189
Right of use asset
Intangible assets
5,144 7,795 2,208
6,466 4,832 3,928
Deferred deposit broker commission
Other temporary differences
72,269
64,184
$
36,231
$
35,681
98 | CWB Financial Group 2023 Annual Report
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