Kia 2015 Annual Report Download - page 106

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(c) Reconciliation of effective tax rate for the years ended December 31, 2015 and 2014 are as follows:
(In millions of won)
2015 2014
Profit before income taxes
₩
3,100,266 3,816,316
Income tax using statutory tax rates (*) 866,776 1,036,084
Adjustment for:
Non-taxable income (61,823) (74,293)
Non-deductible expense 77,546 115,636
Tax credits (264,172) (324,700)
Tax effect for gains/losses on investment in subsidiaries and associates (161,086) 151,040
Others 12,425 (81,044)
Income tax expenses
₩
469,666 822,723
Effective tax rate 15.15% 21.56%
(*) Calculated by multiplying each nation’s statutory tax rate and profit before income taxes on each separate financial statements.
(d) The Company will set off a deferred tax asset against a deferred tax liability of the same taxable entity if, and only if, they relate to income taxes
levied by the same taxation authority and the entity has a legally enforceable right to set off current tax assets against current tax liabilities.
(e) Details of changes in deferred tax assets and liabilities for the year ended December 31, 2015 are as follows:
(In millions of won)
Beginning balance Profit or loss
Other comprehensive
income Ending balance
Allowance for doubtful accounts
₩
13,760 (4,684) - 9,076
Bad debts write-off 57,839 - - 57,839
Accrued expenses 250,327 82,103 - 332,430
Provision of warranty for sale 471,170 118,973 - 590,143
Provision of other long-term employee benefits 59,347 2,802 - 62,149
Annual leaves 27,815 1,839 - 29,654
Revaluated land (358,538) 3,148 - (355,390)
Depreciation (301,483) (157,443) - (458,926)
Investment in subsidiaries and associates (1,551,392) 161,086 - (1,390,306)
Gains/Losses on sales of investment assets and others (57,292) (19,969) - (77,261)
Gains/Losses on valuation of available-for-sale financial assets (145,630) - 104,023 (41,607)
Effective portion of changes in fair value of cash flow hedges 172 (538) (137) (503)
Operating loss carryforward 18,650 74,943 - 93,593
Others 141,602 (22,831) - 118,771
₩
(1,373,653) 239,429 103,886 (1,030,338)
100 | KIA MOTORS
December 31, 2015 and 2014
KIA MOTORS CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS