2012 Annual Report - ZTE

ZTE CORPORATIONNotes to Financial Statements (continued)(Prepared in accordance with PRC ASBEs)(All amounts in RMB’000 unless otherwise stated)(English translation for reference only)V. EXPLANATORY NOTES TO MAJOR ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS(continued)17. Deferred tax assets/liabilitiesDeferred tax assets and deferred tax liabilities were not presented as a net amount after offsetting:Deferred tax assets and liabilities recognised:2012 2011Deferred tax assetsUnrealized profits arising on consolidation 148,805 90,557Provision for impairment in inventory 109,550 86,465Foreseeable contract losses 2,640 10,265Amortization of deferred development costs 60,990 36,913Provision for warranties and returned goods 28,101 51,904Provision for retirement benefits 8,902 8,108Deductible tax losses 499,344 482,340Accruals 171,683 141,816Overseas taxes pending deduction 188,590 220,4681,218,605 1,128,836Deferred tax liabilities2012 2011Appreciation of fixed assets, construction in progress and land userights upon valuation (139,900) —1,078,705 1,128,836Deductible tax losses of unrecognized deferred tax assets:2012 2011Deductible tax losses 7,927,125 1,784,749Unrecognized tax losses expire in the following years:2012 20112012 — 9,3752013 2,188 2,0912014 20,328 19,429After 2014 7,904,609 1,753,8547,927,125 1,784,749228