Porsche 2011 Annual Report Download - page 166

Deferred taxes
Deferred tax assets are generally recognized for deductible temporary differences between the tax
base and carrying amounts in the consolidated balance sheet (taking into account temporary differences
arising from consolidation) as well as on unused tax losses and tax credits if it is probable that they will be
used. Deferred tax liabilities are generally recognized for all taxable temporary differences between the tax
base and the carrying amounts in the consolidated balance sheet (temporary concept). Deferred tax liabilities
for taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures are not recognized if the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
Valuation allowances are recognized on deferred tax assets that are unlikely to be realized in a
manageable period. A previously unrecognized deferred tax asset is reassessed and recognized to the extent
that it has become probable that future taxable profit will allow it to be recovered.
Deferred taxes are measured on the basis of the tax rates that apply or that are expected to apply
based on the current legislation in the individual countries at the time of realization. Deferred taxes are not
discounted.
Deferred taxes referring to items recognized directly in equity are presented in equity. Deferred tax
assets and deferred tax liabilities are offset if the group entities have a legally enforceable right to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.
Current taxes
Current income tax assets and liabilities for the current and prior periods are measured at the amount
expected to be refunded by or paid to the taxation authorities. The tax rates and tax laws applied for
measurement are those that are enacted or substantively enacted by the reporting date. Adequate provisions
were recognized for future probable tax liabilities, considering a large number of factors such as interpretations,
commentaries and jurisdiction on the pertinent tax legislation as well as past experience.
Current tax relating to items recognized directly in equity is also recognized directly in equity.
166 FINANCIALS