185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2003
19. Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities at December 31, 2003 and 2002 are attributable to the following:
Deferred tax assets and liabilities
Assets Liabilities Net
(In thousands of Euros) 2003 2002 2003 2002 2003 2002
Property, plant and equipment - - 1,456 1,346 1,456 1,346
Intangible assets (15,150) (10,270) 58,790 63,723 43,640 53,453
Investment property - - 1,119 845 1,119 845
Investment in subsidiary (14,315) (16,503) - - (14,315) (16,503)
Interest-bearing loans and borrowings (42) (164) 1,098 91 1,056 (73)
Employee benefits - - 245 234 245 234
Provisions (6,398) (4,245) 359 307 (6,039) (3,938)
Other items (1,855) (5,937) - - (1,855) (5,937)
Tax value of loss carry-forwards not recognized (7,006) (1,350) - - (7,006) (1,350)
Net tax (assets)/liabilities (44,766) (38,469) 63,067 66,546 18,301 28,077
The caption "Investment in subsidiary" relates to write off of the value of the investment that is tax deductable.
Unrecognized deferred tax assets
Deferred tax assets have not been recognized in respect of the following items:
2003 2002 Increase
(In thousands of Euros)
(Decrease)
Intangible assets 2,814 4,235 (1,421)
Provisions 131 4,268 (4,137)
Other items 1,643 1,372 271
Tax value of loss carry-forwards not recognized 34,886 20,397 14,489
Total 39,474 30,272 9,202
The tax losses expire in five years. The deductible temporary differences do not expire under current tax legislation.
Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable
profit will be available against which the Group companies can utilize the benefits there from.
Movement in temporary differences during the year
Balance Recognized Recognized Balance
(In thousands of Euros) 01/01/2003 in income in equity 12/31/2003
Property, plant and equipment 1,346 110 - 1,456
Intangible assets 53,453 (8,235) (1,578) 43,640
Investment property 845 274 - 1,119
Investment in subsidiary (16,503) 2,188 - (14,315)
Interest-bearing loans and borrowings (73) 1,129 - 1,056
Employee benefits 234 11 - 245
Provisions (3,938) (2,101) - (6,039)
Other items (5,937) 4,082 - (1,855)
Tax value of loss carry-forwards recognized (1,350) (5,656) - (7,006)
Net tax (assets)/liabilities 28,077 (8,198) (1,578) 18,301
The deferred tax liability on the portion of the cost for the acquisition of the Gianfranco Ferrè Group allocated to
brand has been recognized against Goodwill. Therefore, the positive effect of the change in tax rate from 38.25% to
37.25% of 2003 has not been recognized in the income statement.
F- 71