Barclays 2011 Annual Report Download - page 218

Notes to the financial statements
For the year ended 31 December 2011 continued
11 Tax continued
Other deferred tax assets
The deferred tax asset of £571m (2010: £949m) in other entities includes £144m (2010: £700m) relating to tax losses carried forward. Entities which
have suffered a loss in either the current or prior year have a total deferred tax asset of £189m (2010: £344m) relating to tax losses carried forward and
temporary differences. Recognition is based on profit forecasts which indicate that it is probable that the entities will have future taxable profits against
which the losses and temporary differences can be utilised.
The table below shows movements on deferred tax assets and liabilities during the year. The amounts are different from those disclosed in the balance
sheet as they are presented before offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis.
Fixed asset
timing
differences
£m
Available
for sale
investments
£m
Cash flow
hedges
£m
Retirement
benefit
obligations
£m
Loan
impairment
allowance
£m
Other
provisions
£m
Tax losses
carried
forward
£m
Share
based
payments
£m
Other
£m
Total
£m
Assets 134 76 – 118 345 162 1,558 372 668 3,433
Liabilities (558) (43) (109) – – – – – (720) (1,430)
At 1 January 2011 (424) 33 (109) 118 345 162 1,558 372 (52) 2,003
Income statement 267 10 – (180) 91 110 (54) 37 420 701
Equity – 73 (393) – – – – (82) 3 (399)
Other movements 7 5 13 15 (5) (11) (11) 29 (32) 10
(150) 121 (489) (47) 431 261 1,493 356 339 2,315
Assets 254 186 – 85 431 261 1,493 356 1,435 4,501
Liabilities (404) (65) (489) (132) – – – – (1,096) (2,186)
At 31 December 2011 (150) 121 (489) (47) 431 261 1,493 356 339 2,315
Assets 117 28 139 219 379 294 1,038 336 472 3,022
Liabilities (660) (54) (278) – – – – – (197) (1,189)
At 1 January 2010 (543) (26) (139) 219 379 294 1,038 336 275 1,833
Income statement 42 12 (3) (101) (46) (151) 591 25 (492) (123)
Equity – 53 38 – – – – 12 (44) 59
Other movements 77 (6) (5) – 12 19 (71) (1) 209 234
(424) 33 (109) 118 345 162 1,558 372 (52) 2,003
Assets 134 76 – 118 345 162 1,558 372 668 3,433
Liabilities (558) (43) (109) – – – – – (720) (1,430)
At 31 December 2010 (424) 33 (109) 118 345 162 1,558 372 (52) 2,003
Other movements include deferred tax amounts relating to acquisitions, disposals and exchange.
The amount of deferred tax liability expected to be settled after more than 12 months is £1,044m (2010: £911m). The amount of deferred tax asset
expected to be recovered after more than 12 months is £2,050m (2010: £1,645m). These amounts are before offsetting asset and liability balances
where there is a legal right to set-off and an intention to settle on a net basis.
Unrecognised deferred tax
Deferred tax assets have not been recognised in respect of gross deductible temporary differences of £1,163m (2010: £506m), and gross tax losses of
£2,299m (2010: £6,178m) which includes capital losses of £2,034m (2010: £1,607m). Tax losses of £97m (2010: £70m) expire within 5 years, £101m
(2010: £239m) expire within 6 to 10 years, £5m (2010: £4,262m) expire within 11 to 20 years and £2,096m (2010: £1,607m) can be carried forward
indefinitely. Unrecognised losses that expire within 11 to 20 years have decreased because of an increased recognition of the deferred tax asset in the
US Branch as a result of improved financial performance. Deferred tax assets have not been recognised in respect of these items because it is not
probable that future taxable profits and gains will be available against which the Group can utilise benefits.
Deferred tax is not recognised in respect of the Group’s investments in subsidiaries and branches where remittance is not contemplated and for those
associates and interests in joint ventures where it has been determined that no additional tax will arise. The aggregate amount of temporary differences
for which deferred tax liabilities have not been recognised is £703m (2010: £530m).
Critical accounting estimates and judgements
The Group is subject to income taxes in numerous jurisdictions and the calculation of the Group’s tax charge and worldwide provisions for income taxes
necessarily involves a degree of estimation and judgement. There are many transactions and calculations for which the ultimate tax treatment is
uncertain and cannot be determined until resolution has been reached with the relevant tax authority. The Group recognises liabilities for anticipated
tax audit issues based on estimates of whether additional taxes will be due after taking into account external advice where appropriate. Where the final
tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income
tax assets and liabilities in the period in which such determination is made. These risks are managed in accordance with the Group’s Tax Risk
Framework.
Deferred tax assets have been recognised based on business profit forecasts. Further detail on the recognition of deferred tax assets are provided on
page 213.
216 Barclays PLC Annual Report 2011 www.barclays.com/annualreport