Financial Statements - Solvay

76
Solvay Global Annual Report 2008
(12b) Deferred taxes on the balance sheet
Deferred tax assets and liabilities are recorded in the balance sheet in respect of temporary differences arising from
the fact that the tax authorities apply different rules when assessing assets and liabilities than those used for drawing up
annual accounts. Variations occurring during the year in the deferred taxes recorded in the balance sheet are taken into
income, except where they relate to items that are recorded directly in shareholders’ equity (see above).
Deferred taxes are calculated based on the prevailing tax rates, or where they have been changed, at the enacted rates
that are expected to apply at the time of recording the taxes payable (or recoverable) in the statutory accounts.
Deferred tax assets are written down to the extent that it appears unlikely, in the light of expected future tax situations,
that they will in the future generate either a reduction in the tax base or tax credits.
Unless a dividend payment is planned, no deferred tax is calculated on the undistributed profi ts of subsidiaries
reinvested locally.
The deferred taxes recorded in the balance sheet fall into the following categories:
Deferred tax assets Deferred tax liabilities
EUR Million 2007 2008 2007 2008
Employee benefi ts obligations 190 192
Provisions other than employee benefi ts 198 159
Tax losses 305 483
Tax credits 57 128
Depreciation of tangible assets and amortization of intangible assets 241 199 -366 -367
Development costs -29 -4
Other 264 213 -200 -236
Total (gross amount) 1 255 1 374 -595 -607
Employee benefi ts obligations -59 -68
Provisions other than employee benefi ts -33 -35
Tax losses -146 -191
Tax credits -57 -62
Depreciation of tangible assets and amortization of intangible assets -37 -22
Other -50 -1
Total unrecognized deferred tax assets -381 -379
Offset -350 -344 350 344
Total (net amount) 524 651 -245 -263
In the above table, the 2008 totals include the amount of deferred taxes presented as “assets held for sale” and “liabilities
associated with assets held for sale” in the balance sheet (EUR 2 million of deferred tax assets and EUR 5 million of
deferred tax liabilities).
Unused tax losses (credits) and deductible temporary differences for which a deferred tax asset has not been recognized
amount to EUR 379 million including in this fi gure tax losses amounting to EUR 191 million (mainly Solvay SA:
EUR 86 million and Solvay Chimie: EUR 21 million) and tax credits of EUR 62 million (R&D tax credits in Belgium, mainly
for Solvay SA: EUR 53 million and Solvay Chimie: EUR 3 million).