BMW 2015 Annual Report Download - page 117

117 GROUP FINANCIAL STATEMENTS
Changes in deferred tax assets and liabilities include
changes relating to items recognised either through
the income statement or directly in equity as well as
the
impact of exchange rate and other factors. Deferred
taxes recognised directly in equity increased in total
by
€ 72 million (2014: € 1,429 million). Of this amount,
€ 520 million (2014: € 759 million) related to the fair
value measurement of derivative financial instruments
and marketable securities (recognised directly in equity),
shown in the summary above in the line items “Other
assets” and “Liabilities”. Working in the opposite direc-
tion, deferred taxes relating to remeasurements of the
net defined benefit liability for pension plans (recognised
directly in equity), shown in the summary above in the
line item “Provisions”, fell by € 448 million (2014: increase
of € 670 million).
Deferred taxes are not recognised on retained profits of
€ 33.7 billion (2014: € 30.7 billion) of foreign subsidiaries,
as it is intended to invest these profits to maintain and
expand the business volume of the relevant companies.
A computation was not made of the potential impact
of
income taxes on the grounds of disproportionate ex-
pense.
The tax returns of BMW Group entities are checked
regularly by German and foreign tax authorities. Taking
account of a variety of factors – including existing inter-
pretations,
commentaries and legal decisions taken re-
lating to the various tax jurisdictions and the BMW
Group’s past experience – adequate provision has, to
the extent identifiable and probable, been made for
potential future tax obligations.
Deferred tax assets on tax loss carryforwards and capital
losses before allowances totalled € 548 million (2014:
€ 566 million). After valuation allowances of € 502 million
(2014: € 496 million), their carrying amount stood at
€ 46 million (2014: € 70 million).
Tax losses available for carryforward – for the most
part
usable without restriction – amounted to € 468 mil-
lion (2014: € 469 million). This includes an amount of
€ 345 million (2014: € 228 million), for which a valuation
allowance of € 100 million (2014: € 74 million) was rec-
ognised on the related deferred tax asset. For entities
with tax losses available for carryforward, a net surplus
of deferred tax assets over deferred tax liabilities is
re-
ported at 31 December 2015 amounting to € 104 mil-
lion
(2014: € 140 million). Deferred tax assets are recog-
nised on the basis of management’s assessment of
whether it is probable that the relevant entities will
gen-
erate sufficient future taxable profits, against which
deductible temporary differences can be offset.
Capital losses available for carryforward in the United
Kingdom which do not relate to ongoing operations
increased to € 2,234 million due to exchange rate factors
(2014: € 2,112 million). As in previous years, deferred
tax assets recognised on these tax losses – amounting to
€ 402 million at the end of the reporting period (2014:
€ 422 million) – were fully written down since they can
only be utilised against future capital gains.
Netting relates to the offset of deferred tax assets and
liabilities within individual separate entities or tax
groups to the extent that they relate to the same tax
authorities.
Deferred taxes recognised directly in equity amounted
to € 2,004 million (2014: € 1,889 million), an increase of
€ 115 million (2014: € 1,438 million) compared to the end
of the previous year. The change includes an increase
in deferred taxes recognised in conjunction with
cur-
rency translation amounting to € 43 million (2014: € 9 mil-
lion).
Changes in deferred tax assets and liabilities during the
reporting period can be summarised as follows:
in € million 2015 2014
Deferred taxes at 1 January (assets (–) / liabilities (+)) – 87 839
Deferred tax expense (+) / income (–) recognised through income statement 77 116
Change in deferred taxes recognised directly in equity – 72 – 1,429
Exchange rate impact and other changes 253 387
Deferred taxes at 31 December (assets (–) / liabilities (+)) 171 – 87