Aviva 2005 Annual Report Download - page 165

40 – Tax assets and liabilities continued
(iii) The movement in the net deferred tax liability was as follows:
2005 2004
£m £m
Net liability at 1 January (635) (331)
Acquisition of subsidiaries (36) –
Amounts charged to profit (note 12a) (965) (271)
Amounts credited/(charged) to equity (note 12b) 262 (15)
Exchange differences 6(4)
Other movements (72) (14)
Net liability at 31 December (1,440) (635)
Deferred tax credited to equity includes amounts in respect of pensions and other post-retirement obligations (£213 million) and
unrealised gains on investments (£49 million). The deferred tax charged to the income statement of £965 million represents the
remainder of the movements during the year in the items analysed in note 40(b)(ii) above.
Deferred tax assets are recognised for tax loss carry forwards to the extent that realisation of the related tax benefit through future
taxable profits is probable. The Group has unrecognised tax losses of £1,035 million (2004: £754 million) to carry forward against future
taxable income of the necessary category in the companies concerned. These tax losses will expire as follows; £40 million 5 – 10 years
and £35 million 15 – 20 years (2004: £46 million within 5 – 10 years and £12 million within 15 – 20 years). The remaining losses have
no expiry date. In addition, the Group has an unrecognised capital loss of £446 million (2004: £376 million). This tax loss can only be
offset against future capital gains and has not been recognised in these financial statements. This tax loss has no expiry date.
Deferred tax liabilities of £347 million (2004: £181 million) have not been established for temporary differences associated with
investments in subsidiaries and interests in joint ventures and associates (including tax payable on remittance of overseas retained
earnings) because the Group can control the timing of the reversal of these differences and it is probable that they will not reverse in
the foreseeable future. Such unremitted earnings totalled £1,659 million at 31 December 2005 (2004: £1,185 million).
41 – Provisions
(a) Carrying amounts
2005 2004
£m £m
Deficits in the staff pension schemes (note 42) 1,471 893
Other obligations to staff pension schemes – insurance policies issued by Group companies (note 35a) 875 813
Total IAS 19 obligations to staff pension schemes 2,346 1,706
Restructuring provisions 36 41
Other provisions 493 378
Total 2,875 2,125
Of the total, £2,370 million (2004: £1,812 million) is expected to be settled more than one year after the balance sheet date.
(b) Movements during the year on restructuring and other provisions
Restructuring Other
provision provisions Total
£m £m £m
At 1 January 2005 41 378 419
Additional provisions 131 243 374
Unused amounts reversed (3) (37) (40)
Change in the discounted amount arising from passage of time – (13) (13)
Change in the discounted amount arising from a change in discount rate applied –22
Charge to income statement 128 195 323
Utilised during the year (132) (106) (238)
Acquisition of subsidiaries –3434
Disposal of subsidiaries (1) (8) (9)
At 31 December 2005 36 493 529
Other provisions comprise many small provisions throughout the Group for obligations such as costs of compensation, litigation, staff
entitlements and reorganisation.
Financial statements
Aviva plc 2005
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