Merck 2010 Annual Report Download - page 164

The reconciliation between deferred tax assets and liabilities shown in the balance sheet and
deferred taxes in the income statement is presented below:
EUR million 2010 2009
Change in deferred tax assets (balance sheet) 47.7 65.3
Change in deferred tax liabilities (balance sheet) –617.0 132.7
Deferred taxes credited/debited to equity –54.2 –38.9
Changes in scope of consolidation/currency translation/Other changes 742.6 2.2
Deferred taxes (income statement) 119.1 161.3
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At EUR 693.9 million, “Changes in scope of consolidation/currency translation/Other changes” are
mainly due to the first-time consolidation of Millipore. The other changes were primarily the result
of fluctuations in the exchange rates of the U.S. dollar and the Swiss franc.
Tax loss carryforwards are structured as follows:
EUR million
Dec. 31, 2010 Dec. 31, 2009
Germany Abroad Total Germany Abroad Total
Tax loss carry-
forwards 2.0 194.2  164.3 121.9 
thereof:
Including de-
ferred tax asset – 125.7  98.2 32.4 
Deferred tax
asset – 39.2  14.5 8.3 
thereof:
Excluding de-
ferred tax asset 2.0 68.5  66.1 89.5 
Theoretical de-
ferred tax asset 0.5 20.5  10.5 17.1 
The decrease in tax loss carryforwards compared to 2009 was mainly the result of the positive
business development of the relevant Group companies. Deferred tax assets are recognized for
tax loss and interest carryforwards only if realiza tion of the related tax benefits is probable in the
foreseeable future.
The vast majority of the tax loss carryforwards either has no expiry date or can be carried forward for
up to 20 years. The interest carryforward results from the German earnings stripping rule and has no
expiry date. Deferred tax assets on interest carryforwards from 2009 amounting to EUR 7.5 million
were fully utilized in 2010. In 2010, the income tax expense was reduced by EUR 20.0 million (2009:
EUR 15.6 million) due to the utilization of tax loss carryforwards from prior years for which no
deferred tax asset had been recognized in prior periods.
The tax loss carryforwards accumulated in Germany for corporation tax amounted to EUR 1.5 mil-
lion (2009: EUR 73.8 million) and to EUR 0.5 million (2009: EUR 90.5 million) for trade tax.
The additional theoretically possible deferred tax assets amounted to EUR 21.0 million (2009:
EUR 27.6 million).
160 Merck Annual Report 2010