BMW 2014 Annual Report Download - page 120

120
90 GROUP FINANCIAL STATEMENTS
90 Income Statements
90 Statement of
Comprehensive Income
92 Balance Sheets
94 Cash Flow Statements
96 Group Statement of Changes in
Equity
98 Notes
98 Accounting Principles and
Policies
116 Notes to the Income Statement
123 Notes to the Statement
of Comprehensive Income
124
Notes to the Balance Sheet
149 Other Disclosures
165 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 fluctuations, first-time consolidations and decon-
solidations. Deferred taxes recognised directly in equity
increased in total by € 1,429 million (2013: decrease of
€ 770 million). Of this amount, € 759 million (2013:
€ 421
million) related to the fair value measurement of
derivative financial instruments and marketable securi-
ties (recognised directly in equity), shown in the sum-
mary above in the line items “Other assets”
and “Liabili-
ties”. A further € 670 million (2013: decrease of € 349 mil-
lion) related to the remeasurements of the net defined
benefit liability for pension plans, shown in the sum-
mary above in the line item “Provisions”.
Deferred taxes are not recognised on retained profits
of
€ 30.7 billion (2013: € 28.0 billion) of foreign subsidi-
aries, as it is intended to invest these profits to maintain
and expand the business volume of the relevant com-
panies. A computation was not made of the potential im-
pact of income taxes on the grounds of disproportionate
expense.
The tax returns of BMW Group entities are checked reg-
ularly by German and foreign tax authorities. Taking ac-
count of a variety of factors – including existing interpre-
tations, commentaries and legal decisions taken relating
to the various tax jurisdictions and the BMW Group’s
past experience – adequate provision has, as far as identi-
fiable, been made for potential future tax obligations.
31 December 2014 amounting to € 140 million (2013:
€ 192 million). Deferred tax assets are recognised on
the
basis of management’s assessment of whether it is
probable that the relevant entities will generate
suffi-
cient 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 in-
creased to € 2,112 million due to exchange rate factors
(2013: € 1,975 million). As in previous years, deferred
tax assets recognised on these tax losses – amounting to
€ 422 million at the end of the reporting period (2013:
€ 395 million) – were fully written down since they can
only be utilised against future capital gains.
Netting relates to the offset of deferred tax assets and
liabilities 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 € 1,889 million (2013: € 451 million), an increase of
€ 1,438 million (2013: decrease of € 771 million) com-
pared to the previous year. The change includes an
increase in deferred taxes recognised in conjunction
with currency translation amounting to € 9 million
(2013: reduction of € 1 million).
Changes in deferred tax assets and liabilities during the
reporting period can be summarised as follows:
in € million 2014 2013*
Deferred taxes at 1 January (assets (–) / liabilities (+)) 839 128
Deferred tax expense (+) / income (–) recognised through income statement 116 – 17
Change in deferred taxes recognised directly in equity – 1,429 770
Exchange rate impact and other changes 387 – 42
Deferred taxes at 31 December (assets (–) / liabilities (+)) – 87 839
* Prior year figures have been adjusted in accordance with IAS 8, see note 9.