BAE-annual-report-2014

Financial statements
NOTES TO THE GROUP ACCOUNTS
CONTINUED
15. DEFERRED TAX continued
Movement in temporary differences during the year
At
1 January
2014
£m
Foreign
exchange
adjustments
£m
Acquisitions
and
disposals 1
£m
Recognised
in income
£m
Recognised
in equity
£m
At
31 December
2014
£m
Property, plant and equipment (62) (6) – (10) – (78)
Intangible assets (45) 1 (29) 38 – (35)
Provisions and accruals 308 13 (2) (32) – 287
Goodwill (221) (15) – (37) – (273)
Pension/retirement schemes:
Deficits 692 15 – 12 435 1,154
Additional contributions and other 2 124 7 – 2 (12) 121
Share-based payments 19 – – (2) 4 21
Financial instruments 1 – – 1 19 21
Other items 59 (3) – 10 – 66
Rolled over capital gains (13) – – – – (13)
Capital losses carried forward 13 – – – – 13
Trading losses carried forward 19 1 13 (11) – 22
894 13 (18) (29) 446 1,306
At
1 January
2013
£m
Foreign
exchange
adjustments
£m
Acquisitions
and
disposals
£m
Recognised
in income
£m
Recognised
in equity
£m
At
31 December
2013
£m
Property, plant and equipment (81) 1 (1) 19 – (62)
Intangible assets (91) (1) – 44 3 (45)
Provisions and accruals 317 (11) (1) 3 – 308
Goodwill (186) 6 – (41) – (221)
Pension/retirement schemes:
Deficits 1,144 8 – 5 (465) 692
Additional contributions and other 2 137 (2) – 6 (17) 124
Share-based payments 16 – – – 3 19
Financial instruments 8 – – 8 (15) 1
Other items 62 (4) – 1 – 59
Rolled over capital gains (15) – – 2 – (13)
Capital losses carried forward 15 – – (2) – 13
Trading losses carried forward 36 (4) – (13) – 19
1,362 (7) (2) 32 (491) 894
1. Includes net deferred tax liabilities on acquisition of subsidiaries (£17m) (see note 26) and the transfer of net deferred tax assets to held for sale (£1m) (see note 7).
2. Includes deferred tax assets on US deferred compensation plans.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences, including tax credits 2 1
Capital losses carried forward 38 36
Trading and other losses carried forward 62 62
102 99
These assets have not been recognised as the incidence of future profits in the relevant countries and legal entities cannot be
accurately predicted at this time.
Future changes in tax rates
Under the Finance Act 2013, the UK current tax rate reduced from 23% to 21% with effect from 1 April 2014, and will then reduce to
20% with effect from 1 April 2015. This will reduce future current tax charges accordingly.
The reduction from 23% to 20% was substantively enacted before 31 December 2013. In line with this change, the rate applying to UK
deferred tax assets and liabilities was reduced from 23% to 20%, creating a rate adjustment in 2013, which was partly reflected in the
Consolidated Income Statement and partly in the Consolidated Statement of Comprehensive Income. Accordingly, both recognised and
unrecognised UK deferred tax balances as at 31 December 2013 were calculated at 20% and this rate continues to apply as at
31 December 2014.
2014
£m
2013
£m
130
BAE Systems
Annual Report 2014