Tesco 2006 Annual Report Download - page 60

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58 Tesco plc
Notes to the financial statements continued
Note 6 Taxation continued
Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current
and prior year:
Accelerated Retirement Short-term
tax benefit Share-based timing IAS 32 and
depreciation obligation payments differences Tax losses IAS 39 Total
£m £m £m £m £m £m £m
At 28 February 2004 (694) 202 40 21 5 – (426)
Charge to the Income Statement (99) (55) 23 4 (2) – (129)
Charge to equity – 67 9 – – – 76
Foreign exchange differences (5) – – 2 – – (3)
At 26 February 2005 (798) 214 72 27 3 – (482)
Adoption of IAS 32 and IAS 39 – – – – – 28 28
Charge to the Income Statement (35) 19 22 3 5 – 14
Charge to equity – 131 11 – – (6) 136
Disposal of subsidiary – – – 1 – – 1
Foreign exchange differences (4) – – 1 – – (3)
(837) 364 105 32 8 22 (306)
Discontinuing operation (2) – – – – – (2)
At 25 February 2006 (839) 364 105 32 8 22 (308)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset)
for financial reporting purposes:
2006 2005
£m £m
Deferred tax assets 12 14
Deferred tax liabilities (320) (496)
(308) (482)
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries and joint ventures, because the earnings
arecontinually reinvested by the Group and no tax is expected to be payable on them in the foreseeable future. The temporary
difference unrecognised at the year end amounted to £461m (2005 – £322m).
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profits
will be available against which the Group can utilise the benefits.
2006 2005
£m £m
Deductible temporary differences 31
Tax losses (primarily discontinuing operation) 17 16
20 17
Note 7 Discontinuing operation and assets classified as held for sale
2006
£m
Assets of the disposal group 114
Non-current assets classified as held for sale 54
Total non-current assets classified as held for sale and assets of the disposal group 168
Total liabilities directly associated with the disposal group (86)
Total net assets classified as held for sale 82