Investor Presentaiton
CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | FINANCIAL PERFORMANCE
2.6 INCOME TAXES
Taxes in the statement of income, MEUR
Tax expense for current year
Change in deferred tax assets and liabilities
Tax expense for previous years
Total
Jan 1-Dec 31, 2021
310.0
-17.6
Jan 1-Dec 31, 2020
304.2
-23.4
5.7
298.1
-3.9
276.9
244.9
Accounting principles
Income tax
The Group tax expense includes taxes of subsidiaries
based on taxable income for the period, together with tax
adjustments for previous periods and changes in deferred
taxes. Deferred taxes are provided for temporary
differences arising from difference between the tax bases
of assets and liabilities and their carrying amounts in
financial reporting and measured with enacted tax rates.
Typical temporary differences arise from provisions,
depreciation and amortization, inter-company inventory
margins, defined benefit plans and tax losses carried
forward. Deferred tax assets on unused tax losses and
other temporary differences are recognized to the extent it
is probable that taxable profit is available to offset losses in
the future.
A deferred tax liability is recognized on the undistributed
profits of subsidiaries where such tax is applicable and it is
expected to realize in the foreseeable future.
The positions taken in tax returns are evaluated
periodically by the management to identify situations in
which applicable tax regulation is subject to interpretation.
Based on the evaluation, adjustments for the uncertain tax
positions are recognized when it is considered more likely
than not that certain tax positions will be challenged by the
tax authorities. The amounts recorded are based upon the
estimated final taxes to be paid to the tax authorities.
Reconciliation of income before taxes with total income taxes in the statement of
income, MEUR
Jan 1-Dec 31, 2021
Income before taxes
1,320.8
Jan 1-Dec 31, 2020
1,224.2
Tax calculated at the domestic corporation tax rate (20%)
Effect of different tax rates in foreign subsidiaries
Permanent differences
Taxes from previous years and reassessment of deferred tax assets
264.1
4.1
0.5
-1.2
-4.4
0.8
3.5
Remeasurement of deferred taxes - changes in corporate tax rates
Deferred tax liability on undistributed earnings
0.2
0.4
27.6
27.8
Other
Total
2.5
298.1
4.2
276.9
Effective tax rate, %
Tax rate of parent company, %
2.7 EARNINGS PER SHARE
22.6
22.6
20.0
20.0
Jan 1-Dec 31, 2021
Jan 1-Dec 31, 2020
Net income attributable to the shareholders of the parent company, MEUR
1,014.2
939.2
Weighted average number of shares (1,000 shares)
Basic earnings per share, EUR
518,055
1.96
517,679
1.81
Dilution effect of share-based incentive plans (1,000 shares)
578
Weighted average number of shares, dilution adjusted (1,000 shares)
Diluted earnings per share, EUR
518,634
585
518,264
1.96
1.81
Accounting principles
Earnings per share
The basic earnings per share figure is calculated by
dividing the net income attributable to the shareholders of
the parent company by the weighted average number of
shares outstanding during the year. Diluted earnings per
share is calculated by adjusting the weighted average
number of shares by the effect of potential diluting shares
due to share-based incentive plans of the Group. KONE
has two classes of shares that are both included in the
calculation of earnings per share.
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