2014 Annual report - Statement of changes in equity

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NOTE 9	INCOME TAXES

Specification of income tax expenses
NOK 1 000		2014	2013

Tax payable of net profit
Income tax payable for the year		295 622	185 767
Adjustments of prior periods		13 422	26 804
Total tax payable		309 044	212 571

Deferred tax expense
Change in deferred tax recognised in the income statement		151 184	49 067
Effects of changes in tax rates and prior years' taxes		29 785	5 788
Total deferred tax		180 969	54 855

Income tax expense		490 013	267 426

Tax payable in the balance sheet
NOK 1 000		2014	2013
Tax payable of the year		295 622	185 767
Tax on rendered group contribution			- 7 000
Tax liability from prior years		37 917	84 290
Advance tax paid		- 61 546	- 89 170
Translation differences		5 397	- 6 838
Tax payable		277 390	167 049

Reconciliation of nominal to effective tax rate
NOK 1 000		2014	2013

Profit before tax		1 438 358	2 942 821
Estimated income tax expense at nominal tax rate (27%)		388 357	823 990
Losses and other deductions without any net tax effect		- 567	- 1 806
Non-taxable net income (-) / costs (+) from securities		160 951	- 556 833
Other non-taxable income		- 19 605	- 40 876
Adjustments for prior periods		43 207	32 593
Tax effect of other permanent differences		- 82 330	10 358
Income tax expense		490 013	267 426

Effective tax rate		34,1 %	9,1 %

Tax recognised directly in equity
NOK 1 000		2014	2013
Actuarial loss on pension obligations (note 19)		2 098	- 3 627
Cash flow hedges (note 28)		7 284	- 1 023
Total tax recognised in total comprehensive income		9 382	- 4 650

Deferred tax asset and deferred tax liability
NOK 1 000		2014	2013
Inventories		- 8 482	14 335
Receivables		8 479	8 416
Stocks and bonds		- 359 482	- 186 533
Other differences		26 314	13 714
Tangible assets		- 112 932	41 868
Investment properties		- 51 402	- 89 051
Intangible assets		- 273 348	- 146 318
Net pensions		53 938	46 635
Tax losses to carry forward		389 980	311 775
Total		- 326 935	14 841
Reassessment of deferred tax assets		- 271 211	- 243 927
Net carrying value at 31 December of deferred tax assets (+)/liabilities (-)		- 598 146	- 229 086

Deferred tax assets are reviewed on each balance sheet date, and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow for the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the liability shall be settled or the asset be realised, based on tax rates and legislation prevailing at the balance sheet date.

Gross tax losses to carry forward with expiration years
NOK 1 000		2014
2015		11 575
2016		16 579
2017		20 245
After 2017		331 807
Without expiration		1 423 800
Total tax losses to carry forward		1 804 006

Change in net deferred tax in balance sheet
NOK 1 000		2014	2013
Net carrying value at 1 January		- 229 086	- 187 243
Translation differences		- 40 938	3 592
Acquisition and disposal of subsidiary		- 156 535	14 070
Recognised in income statement during the period		- 180 969	- 54 855
Tax recognised in comprehensive income		9 382	- 4 650
Net carrying value at 31 December		- 598 146	- 229 086

As a consequence of a statement from IFRIC, Ferd has in 2014 recognised deferred tax on investment properties. In previous periods, deferred tax was not recognised on those investment properties expected to be disposed of as limited companies, as such sales are within the tax-exemption model and therefore not taxable. In Ferd's opinion, it is highly unlikely that this tax obligation will be payable. The effect constitutes appr. MNOK 84.

As a consequence of changed legislation for carried interest in PE funds, Ferd's tax basis from such investments is changed. The taxation for the period back to 2007 will be changed with increased deduction as a result. This increased deduction will not be considered in the tax basis until Ferd has received a final decision from the tax authorities.