Tesco 2007 Annual Report Download - page 63

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Note 6 Taxation continued
Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current
and prior year:
Accelerated Retirement Short-term
tax benefit Share-based timing IAS 32 and
depreciation obligation payments differences Tax losses IAS 39 Total
£m £m £m £m £m £m £m
At 26 February 2005 (798) 214 72 27 3 28 (454)
(Charge)/credit to the Income Statement (35) 19 22 3 5 – 14
(Charge)/credit to equity – 131 11 – – (6) 136
Disposal of subsidiary – – – 1 – – 1
Foreign exchange differences (4) – – 1 – – (3)
(837) 364 105 32 8 22 (306)
Discontinued operation (2) –––––(2)
At 25 February 2006 (839) 364 105 32 8 22 (308)
(Charge)/credit to the Income Statement (193) (46) (16) 17 (1) (1) (240)
(Charge)/credit to equity – (34) 47–––13
Acquisition of subsidiaries 9 – – 3 17 – 29
Foreign exchange differences 4 – – (1) – – 3
At 24 February 2007 (1,019) 284 136 51 24 21 (503)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset)
for financial reporting purposes:
2007 2006
£m £m
Deferred tax assets 32 12
Deferred tax liabilities (535) (320)
(503) (308)
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries and joint ventures, because the earnings
are continually reinvested by the Group and no tax is expected to be payable on them in the foreseeable future. The temporary
difference unrecognised at the year end amounted to £565m (2006 – £461m).
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profits
will be available against which the Group can utilise the benefits.
2007 2006
£m £m
Deductible temporary differences 13
Tax losses 12 17
13 20
At the Balance Sheet date, the Group has unused tax losses of £131m (2006 – £96m) available for offset against future profits.
A deferred tax asset has been recognised in respect of £98m (2006 – £27m) of such losses. No deferred tax asset has been
recognised in respect of the remaining £33m (2006 – £69m) due to the unpredictability of future profit streams. Included in
unrecognised tax losses are losses of £10m (2006 – £nil) that will expire in 2011 and £22m (2006 – £nil) that will expire in 2027.
Other losses will be carried forward indefinitely.
61
NOTES TO THE GROUP
FINANCIAL STATEMENTS