27. Deferred Income Taxes
Deferred income taxes are calculated in full on temporary differences arising, in the various countries, between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. The liability method is applied, using tax rates prevailing at the balance sheet dates in the different jurisdictions.
in thousands of EUR | Notes | 2016 | 2015 |
|---|---|---|---|
The gross movement on the deferred income tax assets is as follows: | |||
At 1 January | 67,186 | 80,912 | |
Acquisitions | 128 | 2,407 | |
Income Statement charge | 4,744 | - 8,374 | |
Change because of income rate change | - 1,856 | - 318 | |
Processed through Other comprehensive income | 3,607 | - 2,246 | |
Reclassification | 6 | - 2,864 | |
Exchange differences | 802 | - 2,331 | |
At 31 December | 74,617 | 67,186 | |
Analysis of the deferred income tax assets is as follows: | |||
- Deferred income tax asset to be recovered after more than 12 months | 51,279 | 42,466 | |
- Deferred income tax asset to be recovered within 12 months | 23,338 | 24,720 | |
74,617 | 67,186 | ||
The gross movement on the deferred income tax liability is as follows: | |||
At 1 January | 142,565 | 141,378 | |
Acquisitions | 3,130 | 9,046 | |
Income Statement charge | - 3,664 | - 2,473 | |
Change because of income rate change | - 8,980 | - 970 | |
Processed through Other Comprehensive Income | 1,179 | - 105 | |
Reclassification | - 50 | - 2,394 | |
Exchange differences | - 140 | - 1,917 | |
At 31 December | 134,040 | 142,565 | |
Analysis of the deferred income tax liabilities is as follows: | |||
- Deferred income tax liability to be settled after more than 12 months | 121,189 | 130,389 | |
- Deferred income tax liability to be settled within 12 months | 12,851 | 12,176 | |
134,040 | 142,565 | ||
Net deferred income taxes | 59,423 | 75,379 | |
Deferred income tax assets
in thousands of EUR | 31 December 2016 | 31 December 2015 |
|---|---|---|
Property, plant and equipment | 5,449 | 4,878 |
Goodwill | 224 | 1,249 |
Other intangible assets | 5,738 | 5,075 |
Inventories | 3,758 | 4,698 |
Post-employment benefits | 14,419 | 11,587 |
Provisions | 9,466 | 9,453 |
Derivative financial instruments | 1,197 | 391 |
Deferred revenue and to be invoiced amounts | 6,787 | 7,552 |
Trade and other payables | 4,242 | 3,073 |
Deferred taxes on temporary differences | 51,280 | 47,956 |
Deferred taxes on carry forward losses | 23,337 | 19,230 |
Total deferred income tax assets | 74,617 | 67,186 |
Deferred income tax liabilities
in thousands of EUR | 31 December 2016 | 31 December 2015 |
|---|---|---|
Property, plant and equipment | 10,248 | 10,839 |
Goodwill | 38,476 | 33,524 |
Other intangible assets | 74,951 | 90,804 |
Inventories | 28 | 1 |
Post-employment benefits | 77 | 49 |
Provisions | 7,926 | 5,107 |
Derivative financial instruments | 1,202 | 3 |
Deferred revenue and to be invoiced amounts | 842 | 842 |
Trade and other payables | 290 | 1,396 |
Total deferred income tax liabilities | 134,040 | 142,565 |
Deferred income tax assets on carryforward losses have been recognized for an amount of €23,337 (2015: €19,230). The losses are recognized based on taxable temporary differences or future expected results taking into consideration the expiration date of historical losses and other tax regulations. The related income tax losses amount to €80,317.
Unrecognized income tax losses amount to €251,882 (2015: €208,401). These tax losses expire as follows:
in thousands of EUR | 31 December 2016 | 31 December 2015 |
|---|---|---|
Expiring within one year | 5,890 | 6,607 |
Expiring between one and two years | 5,782 | 4,056 |
Expiring between two and five years | 22,840 | 25,695 |
Expiring after more than five years | 10,726 | 8,337 |
Offsettable for an unlimited period | 206,644 | 163,706 |
251,882 | 208,401 | |
The unrecognized tax losses offsettable for an unlimited period mainly relate to entities in Spain and Brazil. Based on their history of recent losses and the Group's assessment of the availability of expected future taxable results, deferred tax assets have been recognized only to the extent of taxable temporary differences.