GSK Annual Report 2002

92 GlaxoSmithKline Notes to the financial statements
12 Taxation continued
Except as shown in these Financial statements, no provision has been made for taxation which would arise on the distribution of profits
retained by overseas subsidiary and associated undertakings, on the grounds that no remittance of profit retained at 31st December 2002
is required in such a way that incremental tax will arise.
At 31st December 2002, the Group had corporate tax losses of approximately £69 million and capital losses estimated to be in excess of
£9 billion which are not recognised as deferred tax assets because there is insufficient evidence that these losses will be used.
Current Deferred Deferred
tax creditor tax debtor tax provision
Tax balances £m £m £m
At 1st January 2002 as previously reported (1,672) 871 –
Prior year adjustment – 426 (553)
At 1st January 2002 as restated (1,672) 1,297 (553)
Exchange adjustments 103 (79) (12)
Charge to profit and loss account (1,398) (15) (14)
Cash paid 1,633 – –
Other movements (115) 170 (163)
At 31st December 2002 (1,449) 1,373 (742)
2001
2002 (restated)
Deferred taxation asset/(liability) £m £m
Accelerated capital allowances (710) (691)
Stock valuation adjustment (113) (113)
Intra-Group profit 487 375
Product and business disposals (125) (161)
Pensions and other post-retirement benefits 190 298
Tax losses 93 97
Legal and other disputes 124 25
Manufacturing restructuring 52 71
Other net timing differences 633 843
Of the above categories of provided deferred taxation, stock valuation adjustments, intra-Group profit and other timing differences
are current. All deferred taxation movements arise from the origination and reversal of timing differences.
631 744
The Group has implemented the new Financial Reporting Standard, FRS 19 ‘Deferred Tax’, in 2002, which requires deferred tax to be
accounted for on a full provision basis rather than a partial provision basis as before. For the full year 2001 the business performance tax
charge is increased by £8 million, and the total tax charge by £6 million. The net deferred tax asset at 31st December 2001 has been
reduced by £127 million.