BMW 2006 Annual Report Download - page 83

82 Group Financial Statements
65 Group Financial Statements
65 Income Statements
66 Balance Sheets
68 Cash Flow Statements
70 Group Statement of
Changes in Equity
71 Statement of Income and
Expenses recognised directly
in Equity
72 Notes
72 – Accounting Principles
and Policies
79 – Notes to the Income Statement
86 – Notes to the Balance Sheet
104 – Other Disclosures
111 – Segment Information
Current tax expense in the previous year in-
cluded tax reimbursements relating to prior years.
Deferred tax expense decreased mainly as a
result of the lower expense to recognise deferred
tax liabilities.
Deferred taxes are recognised on temporary
differences between the carrying amount of assets
and liabilities for IFRS purposes and their tax bases.
Deferred taxes are computed using enacted or
planned tax rates which are expected to apply in the
relevant national jurisdictions when the amounts are
recovered. A corporation tax rate of 25.0% applies
in Germany. After taking account of the average mul-
tiplier rate (Hebesatz) of 412 % for municipal trade
tax and the solidarity charge of 5.5%, the overall
tax rate for BMW companies in Germany is un-
changed at 38.9 %. The tax rates for companies
outside Germany range from 12.5% to 40.7%
(2005:10.0% to 40.7%). A valuation allowance is
recognised on deferred tax assets when recover-
ability is uncertain. In determining the level of the
valuation allowance, all positive and negative fac-
tors
concerning the likely existence of sufficient
taxable profit in the future are taken into account.
These estimates can change depending on the
actual course of events.
An analysis of deferred taxassets and liabilities
by position at 31 December is shown below:
Compared to the previous reporting period, the
main changes to deferred tax assets and liabilities
were as follows:
The increase of deferred tax liabilities relating
to intangible assets was mainly due to the higher
level of capitalised development costs recognised in
accordance with IFRS.
As at the end of the previous year, no valuation
allowance is recognised on deferred tax assets
relating to capital allowances on property, plant and
equipment in the United Kingdom.
The changes in deferred tax assets and liabili-
ties relating to leased products and other current
assets are attributable primarily to financial services
business. The figures reflect higher business vol-
umes and the different categorisation of operating
and finance lease arrangements for tax and account-
ing purposes.
Deferred tax assets on tax losses available for
carryforward and capital losses increased marginally
on a net basis (i.e. after taking account of the amount
shown as a valuation allowance). This was due to
in euro million Deferred tax assets Deferred tax liabilities
2006 2005 2006 2005
Intangible assets – 11,859 1,594
Property, plant and equipment 48 127 510 474
Leased products 572 780 3,368 3,255
Investments 2 16 ––
Other current assets 1,058 807 3,696 3,810
Tax loss carryforwards 849 947 ––
Provisions 1,540 1,639 134 98
Liabilities 3,653 3,386 827 789
Consolidations 1,600 1,489 403 281
9,322 9,192 10,797 10,301
Valuation allowance –528 –641 ––
Netting –8,039 –7,779 –8,039 –7,779
755 772 2,758 2,522