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4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Income tax
DANONE
REGISTRATION DOCUMENT 2015
113
Note 8.2. Deferred taxes
Accounting principles
Deferred taxes are recognized for all temporary differences between
the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes, except for the cases specified in IAS
12,
Income Taxes
. Deferred taxes are calculated using the liability
method, applying the last enacted income tax rates expected to be
applicable when the temporary differences will be reversed.
In addition, temporary differences are reflected in the consolidated
financial statements as deferred tax assets or liabilities systema-
tically in the case of associates and on the basis of the most likely
scenario as regards the reversal of the differences,
i.e
. distribution
of reserves or disposal of the entity concerned, in the case of fully-
consolidated subsidiaries.
Deferred tax assets and liabilities are offset, when the tax entity
has a legal right to offset.
Lastly, the Company and its subsidiariesmay be subject to tax audits.
A provision is recognized in the consolidated financial statements
whenever it is probable that a tax reassessment will be made.
Carrying amount
As of December 31
(in € millions)
2014
2015
Breakdown by type of deferred tax
Property, plant and equipment and intangible assets
(1,326)
(1,185)
Tax loss carryforwards
(a)
533
516
Provisions for retirement and other long-term benefits
227
220
Employee profit-sharing provisions
20
17
Restructuring provisions
17
17
Other
139
190
Net deferred taxes
(389)
(224)
Deferred tax assets
836
902
Deferred tax liabilities
(1,225)
(1,126)
Net deferred taxes
(389)
(224)
(a) See section hereafter related to Tax loss carryforwards.
Change during the period
(in € millions)
2014
2015
As of January 1
(556)
(389)
Changes recognized in Other comprehensive income
104
(16)
Changes recognized in profit or loss
95
179
Changes in consolidation scope
(a)
1
(3)
Other
(32)
5
As of December 31
(389)
(224)
(a) See Note 2.2 of the Notes to the consolidated financial statements.