Current and Deferred Income Taxes Adoption of New Accounting Standards and Accounting Developments Consolidated Financial Statements Joint Arrangements Teck 2012 Annual Report 64 In May 2011, the IASB issued IFRS 11, Joint Arrangements (IFRS 11), which provides guidance on accounting for joint  arrangements. If an arrangement results in joint control, IFRS 11 classifies joint arrangements as either joint operations  or joint ventures, depending on the rights and obligations of the parties involved. A joint operation is an arrangement where the jointly controlling parties have rights to the assets and obligations in  respect of the liabilities relating to the arrangement. An entity accounts for a joint operation by recognizing its portion  of the assets, liabilities, revenues and expenses. A joint venture is an arrangement where the jointly controlling parties  only have rights to the net assets of the arrangement. A joint venture is accounted for using the equity method. We will apply IFRS 11 as at January 1, 2013, with retrospective application from the date of our earliest period presented,  which will be January 1, 2012. We have substantially completed an analysis of all of our joint arrangements to determine  the appropriate accounting treatment under the new standard, as it is our current accounting policy to proportionately  consolidate all of our joint ventures. Based on our analysis to date, we expect that all of our joint arrangements will be  considered joint operations under IFRS 11 and, accordingly, we will record the assets, liabilities, revenues and expenses  in relation to our interest in each joint operation. As at the date of financial statement approval, we do not expect the  adoption of IFRS 11 to result in significant changes to our consolidated financial statements. In May 2011, the IASB issued IFRS 10, Consolidated Financial Statements (IFRS 10). IFRS 10 establishes principles  for the presentation and preparation of consolidated financial statements when an entity controls one or more other  entities. This IFRS defines the principle of control and establishes control as the basis for determining which entities  are consolidated in an entity’s consolidated financial statements. IFRS 10 sets out three elements of control: power  over the investee; exposure, or rights, to variable returns from involvement with the investee; and the ability to use  power over the investee to affect the amount of the investors’ return. IFRS 10 sets out the requirements on how to  apply the control principle. IFRS 10 supersedes International Accounting Standards (IAS) 27, Consolidated and Separate  Financial Statements and Standing Interpretations Committee (SIC) 12, Consolidation – Special Purpose Entities. We will apply IFRS 10 beginning on January 1, 2013. We have substantially completed our analysis of IFRS 10 and do  not expect any significant changes to our consolidated financial statements as a result of adopting this standard. New International Financial Reporting Standards (IFRS) pronouncements have been issued and will have an effect  on our financial statements beginning on January 1, 2013. The following is a summary of the IFRSs that we will apply  effective January 1, 2013 and the expected effect on our consolidated financial statements. The determination of our tax expense for the year and its deferred tax liabilities and assets involves significant  management estimate and judgment involving a number of assumptions. In determining these amounts, management  interprets tax legislation in a variety of jurisdictions and makes estimates of the expected timing of the reversal of  deferred tax assets and liabilities. Deferred tax liabilities arising from temporary differences on investments in  subsidiaries and joint ventures are recognized unless the reversal of the temporary differences is not expected to  occur in the foreseeable future and can be controlled. Management also makes estimates of future taxable profits,  which affects the extent to which potential future tax benefits may be used. Assumptions about the generation of  future taxable profits and repatriation of retained earnings depend on management’s estimates of future production  and sales volumes, commodity prices, reserves, operating costs, decommissioning and restoration costs, capital  expenditures, dividends and other capital management transactions. We are subject to assessments by various  taxation authorities who may interpret tax legislation differently. These differences may affect the final amount  or timing of the payment of taxes. We provide for these differences, where known, based on management’s best  estimate of the probable outcome of these matters. 