BP 2009 Annual Report Download - page 200

BP Annual Report and Accounts 2009
Parent company financial statements of BP p.l.c.
1. Accounting policies continued
The defined benefit pension plan surplus or deficit in the balance sheet comprises the total for each plan of the present value of the defined benefit
obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled
directly. Fair value is based on market price information and, in the case of quoted securities, is the published bid price. The surplus or deficit, net of
taxation thereon, is presented separately above the total for net assets on the face of the balance sheet.
Deferred taxation
Deferred tax is recognized in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay more, or a right to pay less, tax in the future.
Deferred tax assets are recognized only to the extent that it is considered more likely than not that there will be suitable taxable profits from
which the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences
reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Use of estimates
The preparation of accounts in conformity with generally accepted accounting practice requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the accounts and the reported amounts of revenues and expenses during the
reporting period. Actual outcomes could differ from these estimates.
2. Taxation
198
$ million
T
ax included in the statement of total recognized gains and losses 2009 2008 2007
Deferred tax
Origination and reversal of timing differences in the current year (164) (1,434) 195
This comprises:
Actuarial (loss) gain relating to pensions (164) (1,434) 195
Deferred tax
Deferred tax liability
Pensions 279 399 2,008
Deferred tax asset
Other taxable timing differences 130 77 123
Net deferred tax liability 149 322 1,885
Analysis of movements during the year
At 1 January 322 1,885 1,506
Exchange adjustments 47 (276) 1
Charge (credit) for the year on ordinary activities (56) 147 183
Charge (credit) for the year in the statement of total recognized gains and losses (164) (1,434) 195
At 31 December 149 322 1,885