Year 2017

13. Deferred tax assets and liabilities

 

Changes in deferred tax assets and liabilities are as follows:

 
               

Deferred tax assets 2017

             

EUR million

 

1 Jan

Translation

difference

and

other

changes

Acquired/

Divested

subsidi-

aries

Recorded

through

profit

or loss

Recorded

through other

compre-

hensive

income

31 Dec

Unused tax losses

 

4.8

0.0

 

-0.4

 

4.4

Pension obligations

 

2.4

   

-0.1

0.1

2.4

Restructuring provision

 

2.6

   

-0.6

 

2.0

Impairment on real estate shares

 

2.0

-0.1

 

-0.7

 

1.1

Other temporary differences

 

1.8

0.1

-0.1

-0.9

0.2

1.1

Total

 

13.6

0.0

-0.1

-2.8

0.3

11.0

               

Deferred tax liabilities 2017

             

EUR million

   

1 Jan

Translation

difference

and

other

changes

Acquired/

Divested

subsidi-

aries

Recorded

through

profit

or loss

31 Dec

Fair value measurement of intangible and tangible assets in acquisition

   

16.2

0.0

0.2

-2.1

14.2

Intangible and tangible assets

   

5.6

   

0.3

5.9

Accumulated depreciation in excess of plan

   

4.7

   

-1.2

3.5

Other temporary differences

   

0.1

-0.1

 

0.0

0.1

Total

   

26.6

-0.1

0.2

-3.0

23.7

               

Deferred tax assets 2016

             

EUR million

 

1 Jan

Translation

difference

and

other

changes

Acquired/

Divested

subsidi-

aries

Recorded

through

profit

or loss

Recorded

through other

compre-

hensive

income

31 Dec

Pension obligations

 

2.4

     

0.0

2.4

Unused tax losses

 

9.1

0.0

 

-4.2

 

4.8

Impairment on real estate shares

 

2.6

   

-0.6

 

2.0

Restructuring provision

 

3.3

   

-0.7

 

2.6

Change in revenue recognition for prepaid services

 

5.3

   

-5.3

 

0.0

Other temporary differences

 

0.7

0.2

 

0.8

 

1.8

Total

 

23.3

0.2

-

-10.0

0.0

13.6

               

Deferred tax liabilities 2016

             

EUR million

 

1 Jan

Trans-

lation

differ-

ence

Acquired/

Divested

subsidi-

aries

Recorded

through

profit

or loss

Other

changes

31 Dec

Fair value measurement of intangible and tangible assets in acquisition

 

10.1

2.2

5.5

-1.7

 

16.2

Intangible and tangible assets

 

4.4

   

1.2

 

5.6

Accumulated depreciation in excess of plan

 

7.5

   

-2.8

 

4.7

Other temporary differences

 

1.0

0.1

 

-1.0

 

0.1

Total

 

23.1

2.4

5.5

-4.3

-

26.6

               

Deferred tax assets 2015, restated

             

EUR million

1 Jan

Trans-

lation

differ-

ence

Acquired/

Divested

subsidi-

aries

Recorded

through

profit

or loss

Recorded

through other

compre-

hensive

income

Other

changes

31 Dec

Pension obligations

3.2

0.0

 

0.0

-0.9

 

2.4

Unused tax losses

5.9

0.2

-0.4

3.5

   

9.1

Impairment on real estate shares

2.6

         

2.6

Restructuring provision

2.6

0.0

 

0.2

 

0.5

3.3

Change in revenue recognition for prepaid services

5.1

   

0.2

   

5.3

Other temporary differences

1.7

-0.1

 

-0.4

 

-0.5

0.7

Total

21.1

0.1

-0.4

3.5

-0.9

0.0

23.3

               

Deferred tax liabilities 2015, restated

             

EUR million

 

1 Jan

Trans-

lation

differ-

ence

Acquired/

Divested

subsidi-

aries

Recorded

through

profit

or loss

Other

changes

31 Dec

Fair value measurement of intangible and tangible assets in acquisition

 

15.4

-0.9

0.2

-4.7

 

10.1

Accumulated depreciation in excess of plan

 

10.9

   

-3.4

 

7.5

Other temporary differences

 

5.2

0.0

-0.1

0.5

-0.2

5.4

Total

 

31.6

-0.9

0.1

-7.5

-0.2

23.1

               

Deferred tax assets are recognized to the extent that it is probable that future taxable amounts will be available to utilize the underlying temporary differences and losses. Significant judgment is required to determine the amount that can be recognized. This judgment is described in the accounting principles under the section "Critical accounting estimates and judgments in applying accounting policies."

               

Deferred tax assets decreased during 2017 mostly due to decrease in restructuring provisions and sale of real estate shares. In 2016, deferred tax assets for unused tax losses decreased when the Finnish tax authorities accepted utilization of certain foreign tax losses in the Group's parent company. Simultaneously, the Group recognized deferred tax assets for unused tax losses in Scandinavia totaling EUR 3.2 million as profitability in the Scandinavian business improved in 2016.  In 2015, previously unrecognized deferred tax assets on unused tax losses recognized amounted to EUR 9.2 (0.0) million.

               

On December 31, 2017, the Group had unused tax losses for which it has not recognized deferred taxes of EUR 153.7 (2016: 153.0 2015: 139.9) million, mainly arising from businesses outside Finland. The majority of these losses do not expire.

               

The amount includes EUR 58.7 million of losses which the Finnish tax authorities have rejected. The rejected amounts relate to foreign tax losses and capital losses from foreign real estate entity sale. Posti has appealed the decisions and recognized only a minor amount of deferred tax assets for these losses. Processes were still ongoing at the financial statement date. A positive outcome of the disputes would decrease the Group's taxes by EUR 11.2 million. However, the probability of positive outcome is uncertain.

               

The Group has EUR 18.2 million of temporary differences in taxation, for which the Group has not recognized deferred tax asset. The amount relates to provisions for onerous leases in Russia which was recognized in the income statement in 2017.