Reebok 2012 Annual Report Download - page 253

adidas Group
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2012 Annual Report
Consolidated Financial Statements
231
2012
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04.8
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Notes
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Notes to the Consolidated Income Statement
34 Income taxes
adidas AG and its German subsidiaries are subject to German corporate
and trade taxes. For the years ending December 31, 2012 and 2011, 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, determined
after appropriate offsetting, are presented in the consolidated statement
of financial position:
Deferred tax assets/liabilities (€ in millions)
Dec. 31, 2012 Dec. 31, 2011 1)
Deferred tax assets 528 484
Deferred tax liabilities (368) (430)
Deferred tax assets, net 160 54
1) Restated according to IAS 8, see Note 03.
The movements of deferred taxes are as follows:
Movement of deferred taxes (€ in millions)
2012 2011 1)
Deferred tax assets, net as at January 1 54 49
Deferred tax income 80 28
Change in consolidated companies 2) 3 (9)
Change in deferred taxes attributable to effective
portion of qualifying hedging instruments recorded in
other comprehensive income 3) 23 (21)
Currency translation differences (9) 3
Change in deferred taxes attributable to actuarial
gains and losses recorded in other comprehensive
income 4) 9 4
Deferred tax assets, net as at December 31 160 54
1) Restated according to IAS 8, see Note 03.
2) See Note 04.
3) See Note 29.
4) See Note 24.
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, 2012 Dec. 31, 2011 1)
Non-current assets 135 121
Current assets 132 117
Accrued liabilities and provisions 260 208
Accumulated tax loss carry-forwards 75 76
Deferred tax assets 602 522
Non-current assets 374 393
Current assets 44 49
Accrued liabilities and provisions 24 26
Deferred tax liabilities 442 468
Deferred tax assets, net 160 54
1) Restated according to IAS 8, see Note 03.
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 € 398 million
(restated) to € 508 million for the year ending December 31, 2012. These
amounts mainly relate to tax losses carried forward and unused foreign
tax credits of the US tax group and tax losses carried forward of the
Indian subsidiaries. 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.