Notes to Consolidated Financial Statements  Year ended December 31, 2011  3. Significant accounting policies (continued):  (h) Share based payment transactions  (i) Finance costs  (j) Income tax  GLYPH<g120> temporary differences on the initial recognition of assets or liabilities in a transaction that is  not a business combination and that affects neither accounting nor taxable profit or loss;  GLYPH<g120> temporary differences related to investments in subsidiaries and jointly controlled entities to  the extent that it is probable that they will not reverse in the foreseeable future; and GLYPH<g120> taxable temporary differences arising on the initial recognition of goodwill.  28  2011 Annual Report  Alaris Royalty Corp. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax  liabilities and assets, and they related to income taxes levied by the same tax authority on the same  taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets  on a net basis or their tax assets and liabilities will be realized simultaneously.  Deferred tax is measured at the tax rates that are expected to be applied to temporary differences  when they reverse, based on the laws that have been enacted or substantively enacted by the  reporting period.  Deferred tax is recognized in respect of temporary differences between the carrying amounts of  assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.  Deferred tax is not recognized for:  Current tax is the expected tax payable or receivable on the taxable income or loss for the period,  using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax  payable in respect of previous years. Current tax payable also includes any tax liability arising from  the declaration of dividends.  Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognized  in profit or loss except to the extent that it relates to a business combination, or items recognized  directly in equity or in other comprehensive income.  Finance costs comprise interest expense on borrowings, losses on disposal of available-for-sale  financial assets, and fair value losses on financial assets at fair value through profit or loss.  Borrowing costs that are not directly attributable to the acquisition of a qualifying asset are  recognized in profit or loss using the effective interest method.  The grant-date fair value of share–based payment awards granted to employees is recognized as an  employee expense, with a corresponding increase in equity, over the period that the employees  unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to  reflect the number of awards for which the related service and non-market vesting conditions are  expected to be met, such that the amount ultimately recognized as an expense is based on the  number of awards that meet the related service and non-market performance conditions at the  vesting date. 