BP 2007 Annual Report Download - page 131

BP ANNUAL REPORT AND ACCOUNTS 2007 129
20 Taxation continued
$ million
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Tax included in the statement of recognized income and expense 2007 2006 2005
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Current tax (178) (51) 45
Deferred tax 241 985 214
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63 934 259
This comprises:
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Currency translation differences (139) 201 (11)
Exchange gain on translation of foreign operations transferred to loss on sale of businesses ––(
Actuarial gain relating to pensions and other post-retirement benefits 427 820 356
Share-based payments (213) (26) –
Cash flow hedges (26) 47 (63)
Available-for-sale investments 14 (108) 72
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63 934 259
Reconciliation of the effective tax rate
The following table provides a reconciliation of the UK statutory corporation tax rate to the effective tax rate of the group on profit before taxation from
continuing operations.
$ million
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2007 2006 2005
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Profit before taxation from continuing operations 31,611 34,642 31,921
Tax on profit from continuing operations 10,442 12,331 9,473
Effective tax rate 33% 36% 30%
% of profit before taxation from continuing operations
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UK statutory corporation tax rate 30 30 30
Increase (decrease) resulting from
UK supplementary and overseas taxes at higher rates 711 9
Tax reported in equity-accounted entities (2) (3) (3)
Adjustments in respect of prior years (1) (2) (3)
Restructuring benefits –– (1)
Current year losses unrelieved (prior year losses utilized) (1) (1) (3)
Other –1
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Effective tax rate 33 36 30
Deferred tax $ million
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Income statement Balance sheet
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2007 2006 2005 2007 2006
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Deferred tax liability
Depreciation (54) 1,484 (778) 21,757 21,463
Pension plan surplus 127 173 170 2,136 1,733
Other taxable temporary differences 1,371 417 887 5,998 4,895
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1,444 2,074 279 29,891 28,091
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Deferred tax asset
Petroleum revenue tax 139 4121 (325) (457)
Pension plan and other post-retirement benefit plan deficits (72) 71 220 (1,545) (1,824)
Decommissioning, environmental and other provisions (759) (800) (144) (3,746) (2,960)
Derivative financial instruments 450 (115) (629) (541) (974)
Tax credit and loss carry forward (466) 220 (245) (1,822) (1,118)
Other deductible temporary differences (129) (923) 297 (2,697) (2,642)
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(837) (1,543) (380) (10,676) (9,975)
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Net deferred tax liability 607 531 (101) 19,215 18,116
$ million
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Analysis of movements during the year 2007 2006
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At 1 January 18,116 16,443
Exchange adjustments 42 175
Charge for the year on ordinary activities 607 531
Charge for the year in the statement of recognized income and expense 241 985
Acquisitions 199 –
Other movements 10 (18)
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At 31 December 19,215 18,116
95)
1