CHINA SOUTHERN AIRLINES CO LTD (ifrs-full:DisclosureOfDeferredTaxesExplanatory)

30	Deferred tax assets/ (liabilities)

(a)

Movements of net deferred tax assets are as follows:


	At the beginning of the year			Acquired in business combination			(Charged)/ credited to consolidated income statements			Charged to other comprehensive income			At the end of the year
	RMB million			RMB million			RMB million			RMB million			RMB million
For the year ended December 31, 2017
Deferred tax assets:
Accrued expenses		1,065			—			(45	)		—			1,020
Provision for major overhauls		505			—			186			—			691
Deferred revenue		87			—			1			—			88
Provision for impairment losses		174			—			74			—			248
Provision for tax losses		—			—			10			—			10
Change in fair value of derivative financial instruments		—			—			16			—			16
Others		86			—			(4	)		—			82

		1,917			—			238			—			2,155

Deferred tax liabilities:
Provision for major overhauls		(261	)		—			45			—			(216	)
Depreciation allowances under tax in excess of the related depreciation under accounting		(659	)		—			26			—			(633	)
Change in fair value of derivative financial instruments		(5	)		—			—			(6	)		(11	)
Change in fair value of available-for-sale equity securities		(110	)		—			—			(31	)		(141	)
Fair value remeasurement of identifiable assets in business combination		—			(30	)		4			—			(26	)
Others		(38	)		—			(11	)		—			(49	)

		(1,073	)		(30	)		64			(37	)		(1,076	)

Net deferred tax assets		844			(30	)		302			(37	)		1,079


	At the beginning of the year			Credited/ (charged) to consolidated income statements			Charged to other comprehensive income			At the end of the year
	RMB million			RMB million			RMB million			RMB million
For the year ended December 31, 2016
Deferred tax assets:
Accrued expenses		751			314			—			1,065
Provision for major overhauls		472			33			—			505
Deferred revenue		82			5			—			87
Provision for impairment losses		201			(27	)		—			174
Others		62			24			—			86

		1,568			349			—			1,917

Deferred tax liabilities:
Provision for major overhauls		(384	)		123			—			(261	)
Depreciation allowances under tax in excess of the related depreciation under accounting		(687	)		28			—			(659	)
Change in fair value of derivative financial instruments		(3	)		—			(2	)		(5	)
Change in fair value of available-for-sale equity securities		(20	)		—			(90	)		(110	)
Others		(25	)		(13	)		—			(38	)

		(1,119	)		138			(92	)		(1,073	)

Net deferred tax assets		449			487			(92	)		844

(b)

Deferred tax assets not recognized

Tax losses in the PRC are available for carrying forward to set off future assessable income for a maximum period of five years. As at December 31, 2017, the Group’s unused tax losses of RMB543 million (December 31, 2016: RMB704 million) have not been recognized as deferred tax assets, as it was determined by management that it is not probable that future taxable profits against which the losses can be utilized will be available before they expire. The expiry dates of unrecognized unused tax losses are analyzed as follows:


	2017		2016
	RMB million		RMB million
Expiring in:
2017		—		200
2018		171		214
2019		193		194
2020		—		—
2021		96		96
2022		83		—

		543		704

As at December 31, 2017, the Group’s other deductible temporary differences amounting to RMB653 million (December 31, 2016: RMB626 million) have not been recognized as deferred tax assets as it was determined by management that it is not probable that future taxable profits will be available for these deductible temporary differences to reverse in the foreseeable future.

CHINA SOUTHERN AIRLINES CO LTD | CIK:0001041668 |

ifrs-full:DisclosureOfDeferredTaxesExplanatory