Consolidated Financial Statements 2022 · Page 48

Public Investment Fund and its subsidiaries 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 
(All amounts in million SAR unless otherwise stated) 
Classification: External Confidential 
45 
 
4. 
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued) 
 
4.33 Zakat, income tax and deferred tax 
 
Wholly owned subsidiaries within the Group, that are not exempted (refer to note 12), are subject to Zakat and income tax in accordance 
with the regulations of the Zakat, Tax and Customs Authority (“ZATCA”) in the Kingdom of Saudi Arabia. Not exempted wholly owned 
subsidiaries are subject to zakat, whereas, the subsidiaries with foreign shareholders are subject to zakat for their Saudi shareholders and 
income tax for their foreign shareholders in accordance with the regulations of the ZATCA. The subsidiaries recognize liabilities for any 
anticipated zakat and income tax based on management's best estimates of whether additional zakat/taxes will be due. The final outcome 
of any additional amount assessed by the ZATCA is depending on the eventual outcome of the appeal process which the subsidiary is entitled 
to. Where the final outcome of these matters is different from the amounts that were initially recorded, such differences could impact the 
consolidated statement of profit and loss in the period in which such final determination is made.  
 
Deferred tax assets of foreign subsidiaries are recognized only to the extent that it is probable that future taxable profits will be available 
against which the temporary differences can be utilized. This involves a judgement relating to the future financial performance of the foreign 
subsidiary in which the deferred tax assets have been recognized. Deferred tax liabilities are generally recognized for all temporary 
differences that are taxable. The current income tax is recognized in the consolidated statement of profit or loss. Deferred tax is calculated 
based on tax rates expected to be applied in the period in which liabilities are settled or assets are realized based on laws enacted or 
substantially enacted at reporting date.  
 
Deferred tax assets are recognized in respect of tax losses to the extent that it is probable that future taxable profit will be available against 
which the tax losses can be utilized. Judgement is required to determine the amount of deferred tax assets that can be recognized, based on 
the likely timing and level of future taxable profits, together with future tax-planning strategies. 
 
Significant judgment is also required in determining the position for income taxes across these jurisdictions owing to the complexity of tax 
laws, frequent changes in tax laws and regulations, and the manner of their implementation Judgment must also be exercised whilst 
interpreting the interaction between different taxes and interaction between tax rules of different jurisdictions. Tax provisions are recognized 
by the Group in accordance with tax laws enacted or substantively enacted by the taxing jurisdictions and in accordance with requirements 
of the applicable accounting standards. 
 
4.34 Fair value of contingent consideration of players’ registrations 
 
The costs associated with the acquisition of players’ and key football management staff registrations include an estimate of the fair value of 
any contingent consideration. The estimate of the fair value of the contingent consideration payable requires management to assess the 
likelihood o