Notes to the consolidated accounts
12 Deferred taxation
| € million | € million | € million | € million | € million | |
|---|---|---|---|---|---|
| Movements during the year | As at 1 January 2007 | Income statement(a) |
Equity(b) | Reclassification to liabilities held for disposal | As at 31 December 2007 |
| Pensions and similar obligations | 714 | (198) | (316) | – | 200 |
| Provisions | 692 | 93 | – | 1 | 786 |
| Goodwill and intangible assets | (684) | (121) | 25 | – | (780) |
| Accelerated tax depreciation | (649) | 29 | 20 | 2 | (598) |
| Tax losses | 113 | (32) | 3 | – | 84 |
| Fair value gains | (1) | (1) | (6) | – | (8) |
| Fair value losses | 4 | – | 4 | – | 8 |
| Share-based payments | 92 | (26) | 35 | – | 101 |
| Other | (18) | 15 | – | – | (3) |
| 263 | (241) | (235) | 3 | (210) |
(a) Includes €5 million charge reported under discontinued operations in the income statement.
(b) Of the total movement in equity of €235 million, €7 million arises as a result of currency retranslation.
At the balance sheet date, the Group has unused tax losses of €1 471 million and tax credits amounting to €503 million available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of unused tax losses of €1 146 million and tax credits of €503 million, as it is not probable that there will be future taxable profits within the entities against which the losses can be utilised. The majority of these tax losses and credits arise in tax jurisdictions where they do not expire with the exception of €456 million of state and federal tax losses in the US which expire between now and 2027.
Other deductible temporary differences of €123 million have not been recognised as a deferred tax asset. There is no expiry date for these differences.
At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised was €1 059 million (2006: €755 million). No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet:
| € million Assets |
€ million Assets |
€ million Liabilities |
€ million Liabilities |
€ million Total |
€ million Total |
|
|---|---|---|---|---|---|---|
| Deferred tax assets and liabilities | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 |
| Pensions and similar obligations | 514 | 925 | (314) | (211) | 200 | 714 |
| Provisions | 750 | 670 | 36 | 22 | 786 | 692 |
| Goodwill and intangible assets | (223) | (194) | (557) | (490) | (780) | (684) |
| Accelerated tax depreciation | (234) | (328) | (364) | (321) | (598) | (649) |
| Tax losses | 85 | 112 | (1) | 1 | 84 | 113 |
| Fair value gains | (3) | (1) | (5) | – | (8) | (1) |
| Fair value losses | 8 | 4 | – | – | 8 | 4 |
| Share-based payments | 101 | 92 | – | – | 101 | 92 |
| Other | 5 | (14) | (8) | (4) | (3) | (18) |
| 1 003 | 1 266 | (1 213) | (1 003) | (210) | 263 | |
| Of which deferred tax to be recovered/(settled) after more than 12 months | 484 | 460 | (1 111) | (621) | (627) | (161) |
