BMW 2013 Annual Report Download - page 118

118
88 GROUP FINANCIAL STATEMENTS
88 Income Statements
88 Statement of
Comprehensive Income
90 Balance Sheets
92 Cash Flow Statements
94 Group Statement of Changes in
Equity
96 Notes
96 Accounting Principles and
Policies
114 Notes to the Income Statement
121 Notes to the Statement
of Comprehensive Income
122
Notes to the Balance Sheet
145 Other Disclosures
161 Segment Information
Changes in deferred taxes include changes relating to
items recognised either through the income statement
or directly in equity as well as the impact of exchange
rate and first-time consolidations. Deferred taxes recog-
nised
directly in equity increased in total by € 770 mil-
lion (2012*: decrease of € 30 million). Of this amount,
€ 421 million (2012: € 498 million) related to the fair value
measurement of derivative financial instruments and
marketable securities (recognised directly in equity),
shown in the summary above in the line items “Other
assets” and “Liabilities”. A further € 349 million (2012*:
decrease of € 528 million) related to the remeasurements of
the net defined benefit liability for pension plans, shown
in the summary above in the line item “Provisions”.
Deferred taxes are not recognised on retained profits of
€ 28.0 billion (2012: € 24.8 billion) of foreign subsidiaries,
as it is intended to invest these profits to maintain and
expand the business volume of the relevant companies.
A computation was not made of the potential impact
of income taxes on the grounds of disproportionate
expense.
The tax returns of BMW Group entities are checked
regularly by German and foreign tax authorities. Taking
account of a variety of factors – including existing in-
terpretations,
commentaries and legal decisions taken
relating to the various tax jurisdictions and the BMW
Group’s past experience – adequate provision has, as
far as identifiable, been made for potential future tax
obligations.
management’s assessment of whether it is probable
that the relevant entities will generate sufficient future
taxable profits, against which deductible temporary
differences can be offset.
Capital losses available for carryforward in the United
Kingdom which do not relate to ongoing operations
amounted to € 2.0 billion at the end of the reporting pe-
riod, unchanged from one year earlier. As in previous
years, deferred tax assets recognised on these tax losses
– amounting to € 395 million at the end of the reporting
period after tax rate changes in 2013 (2012: € 465 mil-
lion) – were fully written down since they can only be
utilised against future capital gains.
Netting relates to the offset of deferred tax assets and lia-
bilities within individual separate entities or tax groups
to the extent that they relate to the same tax authorities.
Deferred taxes recognised directly in equity amounted
to € 451 million (2012: € 1,222 million), a decrease of
€ 771 million (2012*: increase of € 27 million) compared
to the previous year. The change includes a reduction
in deferred taxes recognised in conjunction with cur-
rency translation amounting to € 1 million (2012: reduc-
tion of € 3 million).
Changes in deferred tax assets and liabilities during the
reporting period can be summarised as follows:
in € million 2 013 2012*
Deferred taxes at 1 January 1,114 1,347
Deferred tax expense / income recognised through income statement 138 – 216
Change in deferred taxes recognised directly in equity 770 – 30
Exchange rate impact and other changes – 88 13
Deferred taxes at 31 December 1,934 1,114
* Prior year figures have been adjusted in accordance with the revised version of IAS 19,
see note 7.