Philips 2006 Annual Report Download - page 200

Philips Annual Report 2006200
Deferred tax assets and liabilities
Deferred tax assets and liabilities relate to the following balance sheet
captions, of which the movements in temporary differences during the
year are as follows:
balance
December
31, 2005
recognized
in income
recognized
in equity
acquisitions/
deconsoli-
dations other
balance
December
31, 2006
Intangible assets (361 ) 441 (87 ) (502 ) − (509 )
Property, plant and equipment 37 (4 ) (2 ) (5 ) − 26
Inventories 153 (10 ) (3 ) − − 140
Prepaid pension costs 47 (141 )4 − − (90 )
Other receivables 39 10 (1 ) − − 48
Other assets 259 107 (20 ) − − 346
Provisions:
Pensions - 294 (5) (30 ) − − 259
Restructuring - 30 (4 ) (2 ) − − 24
Guarantees - 10 6 (1 ) − − 15
Termination benefi ts - 30 (6 ) (1 ) − − 23
Other postretirement benefi ts - 105 (6 ) (5 ) − − 94
Other - 427 (115 ) (20 )5 − 297
Other liabilities 130 (50 ) (10 ) − − 70
Tax loss carryforward (including tax credit carryforwards) 905 (190 ) (24 ) − (242 ) 449
Net deferred tax assets 2,105 33 (202 ) (502 ) (242 ) 1,192
In assessing the realizability of deferred tax assets, management
considers whether it is probable that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. In order to fully realize the deferred tax
asset, the Company will need to generate future taxable income in
the countries where the net operating losses were incurred. Based
upon the level of historical taxable income and projections for future
taxable income over the periods in which the deferred tax assets are
deductible, management believes as at December 31, 2006, it is
probable that the Company will realize all or some portion of
the recognized benefi ts of these deductible differences.
At December 31, 2006, operating loss carryforwards expire as follows:
Total 2007 2008 2009 2010 2011
2012/
2016 later
un-
limited
3,651 114 8 22 22 24 26 251 3,184
The Company also has tax credit carryforwards of EUR 70 million,
which are available to offset future tax, if any, and which expire as follows:
Total 2007 2008 2009 2010 2011
2013/
2016 later
un-
limited
70 2 1 − − 3 10 16 38
Classifi cation of the income tax payable and receivable is as follows:
2005 2006
Income tax receivable grouped under
current receivables 71 105
Income tax receivable grouped under
non-current receivables 10 25
Income tax payable grouped under
accrued liabilities (524 ) (519 )
Income tax payable grouped under
non-current liabilities (59 ) (36 )
The amount of the unrecognized deferred income tax liability for
temporary differences of EUR 47 million (2005: EUR 118 million)
relates to unremitted earnings in foreign Group companies, which are
considered to be permanently re-invested. Under current Dutch tax
law, no additional taxes are payable. However, in certain jurisdictions,
withholding taxes would be payable.
The tax expense on the gain from the divestment of the Semiconductors
division, as well as the use of tax credits, are under discussion with
the tax authorities.
112 Group fi nancial statements 172 IFRS information
Notes to the IFRS fi nancial statements
218 Company fi nancial statements