Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 548

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 548
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 from other post-employment plans are accounted for on the same basis as defined benefit pension plans. Critical estimates and judgements

| The most significant critical estimates relate to the determination of key assumptions applied in calculating the defined benefit pension obligation for the principalplan. |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Judgements                                                                                                                                                                  | Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                             | –A range of assumptions could be applied, and different assumptions couldsignificantly alter the defined benefit obligation and the amountsrecognised in profit or loss or OCI.–The calculation of the defined benefit pension obligation includesassumptions with regard to the discount rate, inflation rate, pensionpayments and deferred pensions, pay and mortality. Managementdetermines these assumptions in consultation with the plan’s actuaries.–Key assumptions used in calculating the defined benefit pensionobligation for the principal plan and the sensitivity of the calculation todifferent assumptions are described in Note5. |

(l) Tax

Income tax comprises current tax and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to

items recognised in other comprehensive income or directly in equity, in which case the tax is recognised in the same statement as the related

item appears.

Current tax is the tax expected to be payable on the taxable profit for the year and on any adjustment to tax payable in respect of previous

years. HSBC provides for potential current tax liabilities that may arise on the basis of the amounts expected to be paid to the tax authorities.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet, and the

amounts attributed to such assets and liabilities for tax purposes. Deferred tax is calculated using the tax rates expected to apply in the periods

in which the assets will be realised or the liabilities settled.

In assessing the probability and sufficiency of future taxable profit, management considers the availability of evidence to support the

recognition of deferred tax assets, taking into account the inherent risks in long-term forecasting, including climate change-related, and drivers

of recent history of tax losses where applicable. Management also considers the future reversal of existing taxable temporary differences and

tax planning strategies, including corporate reorganisations.

Current and deferred tax are calculated based on tax rates and laws enacted, or substantively enacted, by the balance sheet date.

Critical estimates and judgements

| The recognition of deferred tax assets depends on judgements and estimates. |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Judgements                                                                  | Estimates                                                                                                                                                                                                                                                                                                                                                                                                                        |
| –Specific judgements