Arla Foods Annual Report 2020
Management Review Our Strategy
Our Brands and Commercial Segments Our Responsibility Our Governance
Other areas
5.1 TAX
Our Performance Review Our Consolidated Financial Statements Our Consolidated Environmental, Social and Governance Data
Other areas
5.2 FEES TO AUDITORS APPOINTED BY
THE BOARD OF REPRESENTATIVES
The group recognises deferred tax assets, including the
value of tax losses carried forward, where management
assesses that the tax assets may be utilised in the
foreseeable future by offset against taxable income. The
assessment is performed on an annual basis and is based
on the budgets and business plans for future years.
The group has recognised deferred tax assets in respect
of tax losses carried forward totalling EUR 9 million.
Temporary differences on which deferred tax assets have
not been recognised totalled EUR 29 million which is on
a similar level as last year. Unrecognised deferred tax
assets relate to tax losses carried forward.
Fees paid to EY
The fees to auditors are attributable to EY.
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Accounting policies
Tax in the income statement
Tax in the income statement comprises current tax and
adjustments to deferred tax. Tax is recognised in the
income statement, except to the extent that it relates to
a business combination or items (income or costs)
recognised directly in other comprehensive income.
Current tax
Current tax is assessed based on tax legislation for
entities in the group subject to cooperative or corporate
income taxation. Cooperative taxation is based on the
capital of the cooperative, while corporate income tax is
assessed based on the company's taxable income for the
year. Current tax liabilities comprises the expected tax
payable/receivable on the taxable income or loss for the
year, any adjustment to the tax payable or receivable in
respect of previous years, and for tax paid on account.
Deferred tax
Deferred tax is measured in accordance with the balance
sheet liability method for all temporary differences
between the tax base of assets and liabilities and their
carrying amounts in the consolidated financial
statements. However, deferred tax is not recognised on
temporary differences on initial recognition of goodwill,
or arising at the acquisition date of an asset or liability
without affecting either the profit or loss for the year or
taxable income, except for those arising from M&A
activities.
Deferred tax is determined applying tax rates (and laws)
that have been enacted or substantially enacted by the
end of the reporting period and are expected to apply
when the related deferred tax asset is realised or deferred
tax liability is settled. Changes in deferred tax assets and
liabilities due to changes in the tax rate are recognised
in the income statement except for items recognised in
other comprehensive income.
Deferred tax assets, including the value of tax losses
carried forward, are recognised under other non-current
assets at the value at which they are expected to be
used, either by elimination in the tax of future earnings or
by offsetting against deferred tax payable in companies
within the same legal tax entity or jurisdiction.
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to
the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability
simultaneously.
♫ Uncertainties and estimates
Deferred tax
Deferred tax reflects assessments of actual future tax due
on items in the financial statements, considering timing
and probability. These estimates also reflect expectations
about future taxable profits. Actual future taxes may
deviate from these estimates due to changes to
expectations relating to future taxable income, future
statutory changes in income taxation or the outcome of
tax authorities' final review of the group's tax returns.
Recognition of a deferred tax asset also depends on an
assessment of the future use of the asset.
Table 5.2 Fees to auditors appointed by the Board of Representatives
(EURM)
Statutory audit
Other assurance engagements
Tax assistance
Other services
Total fees to auditors
113 ARLA FOODS ANNUAL REPORT 2020
2020
2019
1,5
1.5
0,2
0.1
0,6
0.7
0,4
0.9
2,7
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