SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank Notes to the Consolidated Financial Statements F-35
Annual Report 2010 on Form 20-F 01 – Significant Accounting Policies
Put and call option contracts with Deutsche Bank shares as the underlying where the number of shares is fixed
and physical settlement is required are not classified as derivatives. They are transactions in the Group’s equity.
All other derivative contracts in which Deutsche Bank shares are the underlying are recorded as financial assets/
liabilities at fair value through profit or loss.
Income Taxes
The Group recognizes the current and deferred tax consequences of transactions that have been included in
the consolidated financial statements using the provisions of the respective jurisdictions’ tax laws. Current and
deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are charged
or credited directly to other comprehensive income.
Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences
between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases, unused tax losses and unused tax credits. Deferred tax assets are recognized only to the extent
that it is probable that sufficient taxable profit will be available against which those unused tax losses, unused
tax credits and deductible temporary differences can be utilized.
Deferred tax assets and liabilities are measured based on the tax rates that are expected to apply in the period
that the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date.
Current tax assets and liabilities are offset when (1) they arise from the same tax reporting entity or tax group
of reporting entities, (2) the legally enforceable right to offset exists and (3) they are intended to be settled net
or realized simultaneously.
Deferred tax assets and liabilities are offset when the legally enforceable right to offset current tax assets and
liabilities exists and the deferred tax assets and liabilities relate to income taxes levied by the same taxing
authority on either the same tax reporting entity or tax group of reporting entities.
Deferred tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries,
branches and associates and interests in joint ventures except when the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the difference will not reverse in the foreseeable
future. Deferred income tax assets are provided on deductible temporary differences arising from such investments
only to the extent that it is probable that the differences will reverse in the foreseeable future and sufficient
taxable income will be available against which those temporary differences can be utilized.
Deferred tax related to fair value remeasurement of AFS investments, cash flow hedges and other items, which
are charged or credited directly to other comprehensive income, is also credited or charged directly to other comprehensive
income and subsequently recognized in the consolidated statement of income once the underlying
gain or loss to which the deferred tax relates is realized.