BUENAVENTURA MINING CO INC (ifrs-full:DisclosureOfDeferredTaxesExplanatory)

27.

Deferred income tax

(a)

The Group recognizes the effects of timing differences between the accounting and tax basis. This caption is made up as follows:

											Credit (debit) to
					Credit (debit) to				Credit (debit)		consolidated
			Credit (debit) to the		consolidated				to the		statements of
			Consolidated		statements of other		As of		Consolidated		other		As of
	As of January 1,		statement of		comprehensive		December 31,		statement of		comprehensive		December 31,
	2016		profit or loss		income		2016		profit or loss		income		2017
	US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)		US$(000)

Deferred asset for income tax included in results
Tax - loss carryforward		78,409		14,641		-		93,050		1,889		-		94,939
Difference in depreciation and amortization rates		52,377		8,506		-		60,883		734		-		61,617
Provision for closure of mining units, net		32,644		6,894		-		39,538		5,030		-		44,568
Impairment loss of long-lived assets		5,185		2,407		-		7,592		2,328		-		9,920
Environmental liability for Santa Barbara mine		1,556		13		-		1,569		(273)		-		1,296
Other minor		14,866		(1,785)		-		13,081		1,082		-		14,163
		185,037		30,676		-		215,713		10,790		-		226,503

Less - Allowance for deferred asset		(18,166)		(18,846)		-		(37,012)		(1,898)		-		(38,910)
		166,871		11,830		-		178,701		8,892		-		187,593

Deferred asset included in retained earnings
Derivative financial instruments		2,441		-		(1,301)		1,140		-		7,963		9,103
		169,312		11,830		(1,301)		179,841		8,892		7,963		196,696

Deferred assets for mining royalties and special mining tax included in results
Exploration expenses		(326)		364		-		38		(38)		-		-
Other minors		185		(180)		-		5		118		-		123
		(141)		184		-		43		80		-		123
Total deferred asset		169,171		12,014		(1,301)		179,884		8,972		7,963		196,819


Deferred liability for income tax included in results
Effect of translation into U.S. dollars		(73,537)		3,012		-		(70,525)		24,502		-		(46,023)
Differences in amortization rates for development costs		(32,304)		(19,484)		-		(51,788)		6,095		-		(45,693)
Other minors		(34,582)		(9,403)		-		(43,985)		(33,618)		-		(77,603)
		(140,423)		(25,875)		-		(166,298)		(3,021)		-		(169,319)

Deferred liability for mining royalties and special mining tax
Other minors		164		(199)		-		(35)		(126)		-		(161)
		164		(199)		-		(35)		(126)		-		(161)
Total deferred liability		(140,259)		(26,074)		-		(166,333)		(3,147)		-		(169,480)

Deferred income tax asset, net		28,912		(14,060)		(1,301)		13,551		5,825		7,963		27,339

(b)

The deferred tax asset is presented in the consolidated statement of financial position:

	2017		2016
	US$(000)		US$(000)

Deferred income tax asset, net		43,129		25,881
Deferred income tax liability, net		(15,790)		(12,330)
		27,339		13,551

(c)

The following is the composition of the provision for income taxes shown in the consolidated statement of income for the years 2017, 2016 and 2015:

	2017		2016		2015
	US$(000)		US$(000)		US$(000)

Current		(23,837)		(39,444)		(14,222)
Deferred		5,825		(14,060)		(541)
		(18,012)		(53,504)		(14,763)

(d)

Below is a reconciliation of tax expense and the accounting profit multiplied by the statutory tax rate for the years 2017, 2016 and 2015:

	2017		2016		2015
	US$(000)		US$(000)		US$(000)

Profit (loss) before income tax		92,545		(255,237)		(340,549)
Loss before income tax for discontinued operations		(10,098)		(19,073)		(20,230)
Profit (loss) before income tax		82,447		(274,310)		(360,779)
Theoretical loss (gain) for income tax		24,322		(76,807)		(101,018)

Permanent items and others:
Effect of translation into U.S. dollars		(24,502)		(3,012)		42,044
Share in the results of associates		(3,896)		102,290		48,545
Mining royalties and special mining tax		(1,538)		247		663
Permanent items		16,513		6,577		4,447
Allowance of deferred tax asset		1,898		18,846		13,929
Effect of change in income tax rate net		-		(1,431)		2,347
Income tax expense		12,797		46,710		10,957
Mining Royalties and Special Mining Tax		5,215		6,794		3,806
Total income tax		18,012		53,504		14,763

(e)

Related to the investment in associates, the Group has not recognized a deferred income tax asset by US$257.3 million as of December 31, 2017, originated by the difference between the financial and taxable basis of these investments (US$257.5 million as of December 31, 2016). Management believes that the timing differences will be reversed in the future without taxable effects. There is no legal or contractual obligation that would require the Company’s Management to sell its investment in its associates (which event would result in a taxable capital gain based on current tax law).

BUENAVENTURA MINING CO INC | CIK:0001013131 |

ifrs-full:DisclosureOfDeferredTaxesExplanatory