Reebok 2011 Annual Report Download - page 214

adidas Group
2011 Annual Report
CONSOLIDATED FINANCIAL STATEMENTS
210
2011
210
2011
04.8
04.8 Notes Notes to the Consolidated Income Statement
Also included in other financial expenses are non-controlling inter-
ests, 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 05, 14, 17 AND 28 .
33 Income taxes
adidas AG and its German subsidiaries are subject to German
corporate and trade taxes. For the years ending December 31, 2011
and 2010, 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 are offset if they relate to the same
fiscal authority. The following deferred tax assets and liabilities, deter-
mined after appropriate offsetting, are presented in the consolidated
statement of financial position:
Deferred tax assets/liabilities (€ in millions)
Dec. 31, 2011 Dec. 31, 2010
Deferred tax assets 493 508
Deferred tax liabilities (430) (451)
Deferred tax assets, net 63 57
The movements of deferred taxes are as follows:
Movement of deferred taxes (€ in millions)
2011 2010
Deferred tax assets, net as at January 1 57 (21)
Deferred tax income 32 76
Change in consolidated companies 1) (9) –
Change in deferred taxes attributable to effective
portion of qualifying hedging instruments recorded
in equity 2) (21) (12)
Currency translation differences 0 11
Change in deferred taxes attributable to actuarial
gains and losses recorded in equity 3) 4 3
Deferred tax assets, net as at December 31 63 57
1) See Note 03.
2) See Note 28.
3) See Note 23.
Gross Group deferred tax assets and liabilities after valuation allow-
ances, but before appropriate offsettings, are attributable to the items
detailed in the table below:
Deferred taxes (€ in millions)
Dec. 31, 2011 Dec. 31, 2010
Non-current assets 121 127
Current assets 125 111
Accrued liabilities and provisions 209 203
Accumulated tax loss carry-forwards 76 101
Deferred tax assets 531 542
Non-current assets 393 443
Current assets 49 19
Accrued liabilities and provisions 26 23
Deferred tax liabilities 468 485
Deferred tax assets, net 63 57
Deferred tax assets are recognised only to the extent that the real-
isation of the related benefit is probable. For the assessment of
probability, in addition to past performance and the respective pros-
pects 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
€ 325 million to € 328 million for the year ending December 31, 2011.
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.
The Group does not recognise deferred tax liabilities for unremitted
earnings of non-German subsidiaries to the extent that they are
expected to be permanently invested in international operations. These
earnings, the amount of which cannot be practicably computed, could
become subject to additional tax if they were remitted as dividends or
if the Group were to sell its shareholdings in the subsidiaries.
Tax expenses
Tax expenses are split as follows:
Income tax expenses (€ in millions)
Year ending
Dec. 31, 2011
Year ending
Dec. 31, 2010
Current tax expenses 289 314
Deferred tax (income) (32) (76)
Income tax expenses 257 238