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  3. Law: Taxation & Customs

sentence (deferred tax assets)

English translation: .. ain't no such animal

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:aktiver latenter Steueraufwand
English translation:.. ain't no such animal
Entered by: Ursula Peter-Czichi

12:54 Oct 2, 2006
German to English translations [PRO]
Bus/Financial - Law: Taxation & Customs
German term or phrase: sentence (deferred tax assets)
The following sentence is from an Annual Report.
Accounting Standard: IFRS?IAS

"Der aktive latente Steueraufwand beruht auf der Aktivierung von körperschaft- und gewerbesteuerlichen Verlustvorträgen, der passive latente Steueraufwand auf zeitlich abweichenden Bilanzierung- und Bewertungsunterschieden zwischen den Wertansätzen nach IFRS und den steuerlichen Wertansätzen."

I am having problems with the "activer latenter Steueraufwand".
A tax expense statement precedes the troublesome sentence.

Active latente Steuern = deferred tax assets
Activer latenter Steueraufwand = ? (deferred tax expense does not seem to fit into the sentence.

Tax expense based on deferred tax assets/liabilities ?
Deferred tax assets/liabilities that are recognized as income ?

I am stumped and would appreciate any help or suggestions (other than trying to understand IAS 12).

Thanks, Ursula
Ursula Peter-Czichi
United States
Local time: 00:41
s.u.
Explanation:
Your confusion is understandable, as it would appear to result from confusion at the preparer about what deferred tax assets and liabilities actually are. There is no such thing as an "aktiver" or "passiver" latenter Steueraufwand, and it looks like the preparer has got itself into a complete muddle over the terminology. I suggest an immediate e-mail to the client pointing out that the German sentence is nonsense and urging them to "repair" it asap.

This is what you would normally expect to see in the English text:

"Deferred tax assets are attributable to the recognition of deferred corporate income (or: corporation) tax and municipal trade tax loss carryforwards. Deferred tax liabilities are attributable to temporary differences between the carrying amounts of assets and liabilities in the IFRS balance sheet and their tax base."

Mind you, understanding the mechanisms of IAS 12 isn't a bad thing to do at all...

--------------------------------------------------
Note added at 2 hrs (2006-10-02 15:04:11 GMT)
--------------------------------------------------

It might help you to tell your client - who evidently has an aversion to defined IFRS/IAS terminology (i.e. "latente Steueransprüche" for deferred tax assets and "latente Steuerschulden" for deferred tax liabilities) - that the German sentence *should* read as follows:

"Aktive latente Steuern beruhen auf der Aktivierung von körperschaft- und gewerbesteuerlichen Verlustvorträgen, passive latente Steuern auf zeitlich abweichenden Bilanzierung- und Bewertungsunterschieden zwischen den Wertansätzen nach IFRS und den steuerlichen Wertansätzen."
Selected response from:

RobinB
United States
Local time: 23:41
Grading comment
Thank you all for your assistance. I have been waiting for the end client's response, waiting and waiting..... - According to several accountants your answers and comments hit the nail on its head: Ain't no such an animal as an "activer latenter Steueraufwand". (Their references to taxable income are quite complicated, probably due to a composite settlement.)
4 KudoZ points were awarded for this answer



Summary of answers provided
4 +1s.u.
RobinB
3s.u.
Harald Pigall


Discussion entries: 2





  

Answers


34 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
s.u.


Explanation:
1 Steuern im Konzernabschluss
Es wird zwischen laufenden und latenten Ertragssteuern unterschieden. Erstere sind zum effektiven Steuersatz zu berechnen und die entsprechende Steuerrückstellung ist separat in der Bilanz oder im Anhang auszuweisen. Die jährliche Abgrenzung der latenten Ertragssteuern basiert auf einer bilanzorientierten Sicht und ist mittels der Comprehensive-Liability-Methode zu berechnen. Passive latente Ertragssteuern sind unter den Rückstellungen, aktive latente Ertragssteuern unter den übrigen Aktiven gesondert auszuweisen. Der latente Steueraufwand ist in der Erfolgsrechnung ebenfalls separat auszuweisen.

--------------------------------------------------
Note added at 53 Min. (2006-10-02 13:48:26 GMT)
--------------------------------------------------

Nicht-Mitgliedstaaten der EU

In der Schweiz hat am 11. November 2002 die Zulassungsstelle der Schweizer Börse (SWX) entschieden, dass alle inländischen börsennotierten Nichtbanken des Hauptsegmentes ab 2005 die IFRS oder US-GAAP einzuhalten haben.

Für in Nebenindizes notierte Unternehmen ist wahlweise die Bilanzierung nach Swiss GAAP FER, IFRS oder US-GAAP vorgeschrieben. Die Swiss GAAP FER lehnen sich bei weniger strengen Vorschriften eng an die IFRS an.


    Reference: http://de.wikipedia.org/wiki/Fachempfehlungen_zur_Rechnungsl...
Harald Pigall
Local time: 06:41
Works in field
Native speaker of: Native in GermanGerman, Native in PolishPolish

Peer comments on this answer (and responses from the answerer)
neutral  RobinB: Could I just point out that your cited reference is to Swiss GAAP (FER). Deferred tax liabilities are *never* carried as provisions in IFRS accounting.//Your addition doesn't change anything, because that first para. refers to FER, not IFRSs!!
11 mins
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18 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
s.u.


Explanation:
Your confusion is understandable, as it would appear to result from confusion at the preparer about what deferred tax assets and liabilities actually are. There is no such thing as an "aktiver" or "passiver" latenter Steueraufwand, and it looks like the preparer has got itself into a complete muddle over the terminology. I suggest an immediate e-mail to the client pointing out that the German sentence is nonsense and urging them to "repair" it asap.

This is what you would normally expect to see in the English text:

"Deferred tax assets are attributable to the recognition of deferred corporate income (or: corporation) tax and municipal trade tax loss carryforwards. Deferred tax liabilities are attributable to temporary differences between the carrying amounts of assets and liabilities in the IFRS balance sheet and their tax base."

Mind you, understanding the mechanisms of IAS 12 isn't a bad thing to do at all...

--------------------------------------------------
Note added at 2 hrs (2006-10-02 15:04:11 GMT)
--------------------------------------------------

It might help you to tell your client - who evidently has an aversion to defined IFRS/IAS terminology (i.e. "latente Steueransprüche" for deferred tax assets and "latente Steuerschulden" for deferred tax liabilities) - that the German sentence *should* read as follows:

"Aktive latente Steuern beruhen auf der Aktivierung von körperschaft- und gewerbesteuerlichen Verlustvorträgen, passive latente Steuern auf zeitlich abweichenden Bilanzierung- und Bewertungsunterschieden zwischen den Wertansätzen nach IFRS und den steuerlichen Wertansätzen."

RobinB
United States
Local time: 23:41
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 155
Grading comment
Thank you all for your assistance. I have been waiting for the end client's response, waiting and waiting..... - According to several accountants your answers and comments hit the nail on its head: Ain't no such an animal as an "activer latenter Steueraufwand". (Their references to taxable income are quite complicated, probably due to a composite settlement.)

Peer comments on this answer (and responses from the answerer)
agree  Kieran McCann: "There is no such thing as an "aktiver" or "passiver" latenter Steueraufwand": exactly
4 hrs
  -> Sounds like my old friends the "Dorf-WPs" at work again.
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