BP 2006 Annual Report Download - page 134

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23 Taxation continued
At 31 December 2006, deferred tax assets were recognized for all deductible temporary differences, carry forward of unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward
of unused tax assets and unused tax losses can be utilized:
– Except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
– In respect of deductible temporary differences associated with investments in subsidiaries, jointly controlled entities and associates, deferred tax
assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will
be available against which the temporary differences can be utilized.
The group has around $4.7 billion (2005 $5.1 billion and 2004 $7.7 billion) of carry-forward tax losses in the UK and Germany, which would be
available to offset against future taxable income. These tax losses do not time expire. At the end of 2006, $216 million of deferred tax assets were
recognized on these losses (2005 $176 million of assets and 2004 no tax assets were recognized). Tax assets are recognized only to the extent that it is
considered more likely than not that suitable taxable income will arise. The group has not recognized any significant deferred tax assets in relation to
carry forwards of losses in other taxing jurisdictions and this is not expected to have a material effect on the group’s tax rate in future years.
At the end of 2006, the group had around $2.0 billion (2005 $1.5 billion) of unused tax credits in the UK and the US, in respect of which no deferred
tax assets have been recognized. In 2006, $828 million of tax credits were utilized (2005 $774 million).
The major components of temporary differences in the current year are tax depreciation, US inventory holding gains (classified under other taxable
temporary differences) and provisions.
24 Dividends
pence per share cents per share $ million
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2006 2005 2004 2006 2005 2004 2006 2005 2004
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Dividends announced and paid
Preference shares 222
Ordinary shares
March 5.288 4.522 3.674 9.375 8.500 6.750 1,922 1,823 1,492
June 5.251 4.450 3.807 9.375 8.500 6.750 1,893 1,808 1,477
September 5.324 5.119 3.860 9.825 8.925 7.100 1,943 1,871 1,536
December 5.241 5.061 3.910 9.825 8.925 7.100 1,926 1,855 1,534
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21.104 19.152 15.251 38.400 34.850 27.700 7,686 7,359 6,041
Dividend announced per ordinary share,
payable in March 2007 5.258 ––10.325 ––1,999 ––
The group does not account for dividends until they have been paid. The accounts for the year ended 31 December 2006 do not reflect the dividend
announced on 6 February 2007 and payable in March 2007; this will be treated as an appropriation of profit in the year ended 31 December 2007.