DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. AND ...

Doosan Heavy Industries & Construction Co., Ltd. and SubsidiariesNotes to the Consolidated Financial StatementsFor the years ended December 31, 2012 and 201131. Income Taxes(1) The component of income tax expense (benefit) for the years ended December 31, 2012 and 2011 are asfollows:(In millions of won) 2012 2011Current tax ₩ 98,504 117,958Changes in deferred tax (160,898) (30,272)Deferred tax credited to equity 35,202 3,007Deferred tax charged to profit or loss from discontinued operation - (28,583)Income tax expense (benefit) ₩ (27,192) 119,276(2) Changes in deferred tax assets (liabilities) for the years ended December 31, 2012 and 2011 are asfollows:(i) 2012BeginningIncreaseEnding(In millions of won)balance(decrease)balanceProvision for retirement and severance benefits ₩ 61,226 6,451 67,677Allowance for doubtful accounts 66,702 25,329 92,031Property, plant and equipment (12,847) 20,196 7,349Reserve for research and development (35,574) (10,890) (46,464)Investments (8,034) 3,598 (4,436)Development costs 34,808 5,352 40,160Derivative financial instruments 15,042 4,308 19,350Foreign currency assets (liabilities) 2,735 (8,694) (5,959)Land revaluation gain (165,505) (16,550) (182,055)Others (149,431) 131,798 (17,633)₩ (190,878) 160,898 (29,980)(ii) 2011BeginningIncreaseEnding(In millions of won)balance(decrease)balanceProvision for retirement and severance benefits ₩ 50,008 11,218 61,226Allowance for doubtful accounts 86,072 (19,370) 66,702Property, plant and equipment 3,892 (16,739) (12,847)Reserve for research and development (16,434) (19,140) (35,574)Investments (21,178) 13,144 (8,034)Development costs 28,296 6,512 34,808Derivative financial instruments (14,707) 29,749 15,042Foreign currency assets (liabilities) (494) 3,229 2,735Land revaluation gain (230,243) 64,738 (165,505)Others (106,362) (43,069) (149,431)₩ (221,150) 30,272 (190,878)(3) The amount of deductible temporary differences for which no deferred tax asset is recognized in thestatements of financial position as of December 31, 2012 and 2011 are as follows:(In millions of won) 2012 2011Deductible temporary differences ₩ 359,404 188,45974