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26. Deferred tax

Deferred tax assets

US$ million 2008 2007
At 1 January 474 372
(Charged)/credited to the income statement(1) (31) 109
(Charged)/credited to the statement of recognised income and expense (57) 30
Charged directly to equity (40) (2)
Acquired through business combinations 10
Transfer to assets held for sale (14)
Disposal and demerger of businesses (55)
Reclassifications (21) (2)
Currency movements (53) 12
At 31 December 258 474

(1) Includes amounts in respect of discontinued operations of nil (2007: $9 million).

Deferred tax liabilities

US$ million 2008 2007
At 1 January 4,650 3,687
Charged to the income statement(1) 398 456
(Credited)/charged to the statement of recognised income and expense (130) 150
Charged directly to equity 25
Acquired through business combinations 798 904
Transfer to liabilities directly associated with assets held for sale (28) (77)
Disposal and demerger of businesses (18) (649)
Reclassifications 79 2
Currency movements (1,219) 177
At 31 December 4,555 4,650

(1) Includes amounts in respect of discontinued operations of nil (2007: $12 million).

The amount of deferred tax provided in the accounts is as follows:

US$ million 2008 2007
Deferred tax assets
Tax losses 13 14
Other temporary differences 245 460
  258 474
Deferred tax liabilities
Capital allowances in excess of depreciation 2,333 2,640
Fair value adjustments 2,201 2,121
Tax losses (117) (46)
Other temporary differences 138 (65)
  4,555 4,650

The amount of deferred tax charged/(credited) to the income statement (including amounts related to discontinued operations) is as follows:

US$ million 2008 2007
Capital allowances in excess of depreciation 460 373
Fair value adjustments (96) (63)
Tax losses (18) (27)
Other temporary differences 83 64
  429 347

The current expectation regarding the maturity of deferred tax balances is:

US$ million 2008 2007
Deferred tax assets
Recoverable within 12 months 62 163
Recoverable after 12 months 196 311
  258 474
Deferred tax liabilities
Payable within 12 months 218 790
Payable after 12 months 4,337 3,860
  4,555 4,650

The Group had the following balances at 31 December 2008 in respect of which no deferred tax asset has been recognised:

US$ million Tax
losses – revenue
Tax
losses – capital
Other
temporary
differences
Total
Within one year
One to five years 43 43
After five years 21 21
No expiry date 2,600 1,166 5 3,771
  2,664 1,166 5 3,835

The Group had the following balances at 31 December 2007 in respect of which no deferred tax asset was recognised:

US$ million Tax
losses –
revenue
Tax
losses –
capital
Other
temporary
differences
Total
Within one year 8 8
One to five years 1 1
After five years 22 6 28
No expiry date 2,248 1,430 3,678
  2,279 1,430 6 3,715

The Group also has unused tax credits of $356 million (2007: $211 million) for which no deferred tax asset is recognised in the balance sheet. These tax credits have no expiry date.

No liability has been recognised in respect of temporary differences associated with investments in subsidiaries, branches and associates and interests in joint ventures, where the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future. The aggregate amount of temporary differences associated with investments in subsidiaries, branches and associates and interests in joint ventures, for which a deferred tax liability has not been recognised is $23,866 million (2007: $20,724 million), on which tax may be payable up to $6,682 million (2007: $5,906 million).

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