Siemens 2005 Annual Report Download - page 161

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As of September 30, 2005, the Company had €6,731 of gross tax loss carryforwards. Of the
total, €5,884 tax loss carryforwards have unlimited carryforward periods and €847 expire over
the periods to 2023. An amount of €411 in valuation allowances for deferred tax assets would be
allocated to reduce goodwill or other intangible assets of acquired entities should the related tax
benefits be subsequently recognized.
In assessing the realizability of deferred tax assets, management considers whether it is more
likely than not that some portion of the deferred tax asset will not be realized. The ultimate real-
ization of deferred tax assets is dependent upon the generation of future taxable profits during
the periods in which those temporary differences and tax loss carryforwards become deductible.
Management considers the scheduled reversal of deferred tax liabilities and projected future tax-
able income in making this assessment. Based upon the level of historical taxable income and
projections for future taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not the Company will realize the benefits
of these deductible differences, after giving effect to related valuation allowances.
The Company provides for income taxes or foreign withholding taxes on the cumulative
earnings of foreign subsidiaries when it is determined that such earnings either will be subject to
taxes or are intended to be repatriated. In fiscal year 2005, income taxes on cumulative earnings
of €7,167 of foreign subsidiaries have not been provided for because such earnings will either not
be subject to any such taxes or are intended to be indefinitely reinvested in those operations. It is
not practicable to estimate the amount of the unrecognized deferred tax liabilities for these
undistributed foreign earnings.
Including the items charged or credited directly to related components of AOCIand the benefit
from discontinued operations, the provision (benefit) for income taxes consists of the following:
Notes to Consolidated Financial Statements
Consolidated Financial Statements Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
Year ended
September 30,
2005 2004
Provision for income taxes 979 767
Discontinued operations (498) (106)
Shareholders’ equity for other comprehensive income (763) 588
(282) 1,249