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G4S Annual Report and Accounts 2011

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Governance Financial statements Shareholder information<br />

36 Deferred tax<br />

The following are the major deferred tax liabilities <strong>and</strong> assets recognised by the group <strong>and</strong> movements thereon during the current <strong>and</strong> prior reporting<br />

periods:<br />

Retirement<br />

benefit<br />

obligations<br />

£m<br />

Intangible<br />

assets<br />

£m<br />

Tax<br />

losses<br />

£m<br />

Other<br />

temporary<br />

differences<br />

£m<br />

At 1 January 2010 92 (106) 28 42 56<br />

(Charge)/credit to the income statement (11) 26 (2) (3) 10<br />

Acquisition of subsidiaries – (3) – – (3)<br />

Disposal of subsidiaries – 2 – – 2<br />

(Charge)/credit to equity (7) – – 5 (2)<br />

Translation adjustments 1 (3) 1 1 –<br />

At 31 December 2010 75 (84) 27 45 63<br />

At 1 January <strong>2011</strong> 75 (84) 27 45 63<br />

(Charge)/credit to the income statement (11) 25 (4) – 10<br />

Acquisition of subsidiaries – (19) – – (19)<br />

Credit/(charge) to equity 12 – – (1) 11<br />

Transfers/other – 1 – 1 2<br />

At 31 December <strong>2011</strong> 76 (77) 23 45 67<br />

Total<br />

£m<br />

Certain deferred tax assets <strong>and</strong> liabilities have been offset where permitted. The following is the analysis of the deferred tax balances (after offset) for<br />

financial reporting purposes:<br />

<strong>2011</strong><br />

£m<br />

2010<br />

£m<br />

Deferred tax liabilities (90) (98)<br />

Deferred tax assets 157 161<br />

Total deferred tax position 67 63<br />

At 31 December <strong>2011</strong>, the group has unutilised tax losses of approximately £456m (2010: £526m) potentially available for offset against future profits.<br />

A deferred tax asset of £23m (2010: £27m) has been recognised in respect of approximately £71m (2010: £76m) of gross losses. No deferred tax asset has<br />

been recognised in respect of the remaining £385m (2010: £450m) of gross losses due to the unpredictability of future profit streams in the relevant<br />

jurisdictions <strong>and</strong> the fact that a significant proportion of such losses remains unaudited by the relevant tax authorities. Included in unrecognised tax losses<br />

are gross losses of £4m, £2m, £1m, £2m <strong>and</strong> £3m which will expire in 2012, 2013, 2014, 2015 <strong>and</strong> 2016 respectively. Other losses may be carried forward<br />

indefinitely.<br />

At 31 December <strong>2011</strong>, the aggregate amount of temporary differences associated with undistributed earnings of non-UK subsidiaries for which deferred tax<br />

liabilities have not been recognised is £1,401m (2010: £1,445m). No liability has been recognised in respect of these gross differences on the basis that the<br />

group is in a position to control the timing of the reversal of the temporary differences <strong>and</strong> it is probable that such differences will not reverse in the<br />

foreseeable future.<br />

Temporary differences arising in connection with interests in associates <strong>and</strong> joint ventures are insignificant.<br />

At 31 December <strong>2011</strong>, the group has total unprovided contingent tax liabilities of approximately £11m (2010: £8m) relating to unresolved tax issues in<br />

various jurisdictions.<br />

<strong>G4S</strong> plc<br />

<strong>Annual</strong> <strong>Report</strong> <strong>and</strong> <strong>Accounts</strong> <strong>2011</strong><br />

117

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