Volvo 2010 Annual Report Download - page 88
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 INCOME TAXES
Income taxes were distributed as follows:
2009 2010
Current taxes relating to the period (989) (3,668)
Adjustment of current taxes
for prior periods (73) 180
Deferred taxes originated or
reversed during the period 6,981 (747)
Recognitionand derecognition
of deferred tax assets (30) (67)
Total income taxes 5,889 (4,302)
Provisions have been made for estimated tax charges that may arise
as a result of prior tax audits in the Volvo Group. Volvo evaluates tax
processes on a regular basis and makes provisions for possible out-
come when it is probable that Volvo will have to pay more taxes and
when it is possible to make a reasonably assessment of the possible
outcome. Tax claims for which no provision has been deemed neces-
sary were reported as contingent liabilities.
Deferred taxes relate to income taxes payable or recoverable in
future periods in respect of taxable temporary differences, deductible
temporary differences, unused tax-loss carryforwards or unused tax
credit carryforwards. Deferred tax assets are recognized to the extent
that it is probable that the amount can be utilized against future tax-
able income. At December 31, 2010, the valuation allowance attribut-
able to deductible temporary differences, unused tax-loss carry for-
wards and unused tax credit carryforwards for which no deferred tax
asset was recognized amounted to 339 (296). The major part of the
reserve consists of unused loss carryforwards.
Deferred taxes amounting to 93 (neg: 816) have been reported in
other comprehensive income, attributable to fair value of derivative
instruments.
At year-end 2010, the Group had unused tax-loss carryforwards
amounting to 25,000 (30,200). These loss carryforwards expire
according to the table below:
Due date 2009 2010
2011 300 100
2012 100 100
2013 100 200
2014 400 400
2015 800 800
2016– 28,500 23,400
Total 30,200 25,000
The Swedish corporate income tax rate is 26.3%. The table below
shows the principal reasons for the difference between this rate and
the Group's tax rate, based on income after financial items.
2009, % 2010, %
Swedish corporate income tax rates 26 26
Difference in tax rate in various countries 2 4
Capital gains 0 0
Other non-taxable income 0 (3)
Other non-deductible expenses 0 1
Adjustment of current taxes for prior years 1 (1)
Recognitionand derecognition
of deferred tax assets 1 1
Other, net (1) 0
Income tax rate for the Group 29 28
FINANCIAL INFORMATION 2010
84