Reebok 2010 Annual Report Download - page 220

216 Consolidated Financial Statements Notes Notes to the Consolidated Income Statement
Other financial expenses include impairment losses on other financial assets amounting to
€ 0 million for the year ending December 31, 2010 (2009: € 5 million).
Also included in other financial expenses are non-controlling interests, which are not recorded
in equity according to IAS 32 “Financial Instruments: Presentation” see Note 26.
Information regarding the Group’s available-for-sale investments, borrowings and financial
instruments is also included in these Notes see Notes 5, 14, 17 and 28.
Income taxes 33
adidas AG and its German subsidiaries are subject to German corporate and trade taxes. For
the years ending December 31, 2010 and 2009, respectively, the statutory corporate income tax
rate of 15% plus a surcharge of 5.5% thereon is applied to earnings. The municipal trade tax is
approximately 11.6% of taxable income.
For non-German subsidiaries, deferred taxes are calculated based on tax rates that have been
enacted or substantively enacted by the closing date.
Deferred tax assets and liabilities Deferred tax assets and liabilities
Deferred tax assets and liabilities are offset if they relate to the same fiscal authority. The
following deferred tax assets and liabilities, determined after appropriate offsetting, are presented
in the consolidated statement of financial position:
Deferred tax assets/liabilities
€ in millions
Dec. 31, 2010 Dec. 31, 2009
Deferred tax assets 508 412
Deferred tax liabilities (451) (433)
Deferred tax assets, net 57 (21)
The movements of deferred taxes are as follows:
Movement of deferred taxes
€ in millions
2010 2009
Deferred tax assets, net as at January 1 (21) (119)
Deferred tax income 76 43
Change in deferred taxes on assets classified as held for sale see Note 10 — (3)
Change in deferred taxes attributable to effective portion of qualifying hedging
instruments recorded in equity see Note 28 (12) 46
Currency translation differences 11 6
Change in deferred taxes attributable to actuarial gains and losses recorded
in equity see Note 23 3 6
Deferred tax assets, net as at December 31 57 (21)
Gross Group deferred tax assets and liabilities after valuation allowances, but before appropriate
offsettings are attributable to the items detailed in the table below:
Deferred taxes
€ in millions
Dec. 31, 2010 Dec. 31, 2009
Non-current assets 127 129
Current assets 111 87
Accrued liabilities and provisions 203 132
Accumulated tax loss carry-forwards 101 78
Deferred tax assets 542 426
Non-current assets 443 420
Current assets 19 25
Accrued liabilities and provisions 23 2
Deferred tax liabilities 485 447
Deferred tax assets, net 57 (21)
Deferred tax assets are recognised only to the extent that the realisation of the related benefit is
probable. For the assessment of probability, in addition to past performance and the respective
prospects for the foreseeable future, appropriate tax structuring measures are also taken into
consideration.
Deferred tax assets for which the realisation of the related tax benefits is not probable
increased on a currency-neutral basis from € 297 million to € 325 million for the year ending
December 31, 2010. These amounts mainly relate to tax losses carried forward and unused
foreign tax credits of the US tax group. The remaining unrecognised deferred tax assets relate to
subsidiaries operating in markets where the realisation of the related tax benefit is not considered
probable.