Siemens 2007 Annual Report Download - page 237

Notes to Consolidated Financial Statements 237
(in millions of €, except where otherwise stated and per share amounts)
Notes to Consolidated Financial Statements
Deferred tax assets have not been recognized in respect of the following items
(gross amounts):
The decrease in unrecognized deductible temporary differences is primarily
due to reorganizations for which it is probable that future taxable income will
allow the deferred tax asset to be recovered. The amount of unrecognized tax loss
carryforward has decreased due to deconsolidation of previously consolidated
companies. The amount of unrecognized tax loss carryforward as of September
30, 2007 includes an amount of €107 which is related to tax loss carryforwards for
German trade tax purposes only. The corresponding tax effect amounts to €16.
As of September 30, 2007 and 2006, resepectively, €203 and €323 of the unrec-
ognized tax loss carryforwards expire over the periods to 2023.
The Company provides for income taxes or foreign withholding taxes on the
cumulative earnings of subsidiaries when it is determined that such earnings
either will be subject to taxes or are intended to be repatriated. In fi scal year 2007,
income taxes on cumulative earnings of €8,558 of subsidiaries have not been pro-
vided for because such earnings will either not be subject to any such taxes or are
intended to be indefi nitely reinvested in those operations. It is not practicable to
estimate the amount of the unrecognized deferred tax liabilities for these undis-
tributed earnings.
Including the items charged or credited directly to equity and the expense
(benefi t) from continuing and discontinued operations, the income tax expense
(benefi t) consists of the following:
As of
September 30,
2007 2006
Deductible temporary differences 182 982
Tax loss carryforward 565 1,135
747 2,117
Year ended
September 30,
2007 2006
Continuing operations 1,192 776
Discontinued operations 1,001 (1)
Income and expense recognized directly in equity 326 (294)
Other changes in equity* (499) 316
2,020 797
* Tax effect of reclassifi cation on conversion right (see also Notes 22 and 26).