HUANENG POWER INTERNATIONAL INC | CIK:0000929058 | 3

  • Filed: 4/12/2018
  • Entity registrant name: HUANENG POWER INTERNATIONAL INC (CIK: 0000929058)
  • Generator: Unknown
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    • ifrs-full:DisclosureOfDeferredTaxesExplanatory

    31
    Deferred income tax assets and liabilities

    The deferred income tax assets and liabilities are as follows:
     
       
    As at 31 December
    		  
       
    2017
    		    
    2016
    		  
                 
    Deferred income tax assets before offsetting
    		    
    3,604,577
    		      
    2,432,552
    		  
    Offset amount
    		    
    (1,304,486
    )
    		    
    (1,168,595
    )
                     
    Deferred income tax assets after offsetting
    		    
    2,300,091
    		      
    1,263,957
    		  
                     
    Deferred income tax liabilities before offsetting
    		    
    (5,871,166
    )
    		    
    (3,431,347
    )
    Offset amount
    		    
    1,304,486
    		      
    1,168,595
    		  
                     
    Deferred income tax liabilities after offsetting
    		    
    (4,566,680
    )
    		    
    (2,262,752
    )
                     
         
    (2,266,589
    )
    		    
    (998,795
    )
     
    The gross movement on the deferred income tax accounts is as follows:
     
       
    2017
    		    
    2016
    		    
    2015
    		  
                       
    Beginning of the year
    		    
    (998,795
    )
    		    
    (1,429,752
    )
    		    
    (926,481
    )
    Business combination (Note 40)
    		    
    (2,322,513
    )
    		    
    (58,929
    )
    		    
    (1,007,147
    )
    Disposal of subsidiaries (Note 6)
    		    
    17,407
    		      
    -
    		      
    -
    		  
    Credited to profit or loss (Note 33)
    		    
    724,712
    		      
    440,817
    		      
    687,206
    		  
    Charged to other comprehensive income
    		    
    330,834
    		      
    87,775
    		      
    (198,525
    )
    Currency translation differences
    		    
    (18,234
    )
    		    
    (38,706
    )
    		    
    15,195
    		  
                             
    End of the year
    		    
    (2,266,589
    )
    		    
    (998,795
    )
    		    
    (1,429,752
    )
     
    The movements in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdictions, are as follows:

    Deferred income tax assets:
     
       
    Hedging reserve
    		    
    Amortization of land use rights
    		    
    Provision for impairment loss
    		    
    Depreciation
    		    
    Accrued expenses
    		    
    VAT refunds on purchases of domestically manufactured equipment
    		    
    Unused tax losses
    		    
    Others
    		    
    Total
    		  
                                                           
                                                           
    As at 1 January 2016
    		    
    199,876
    		      
    14,417
    		      
    399,418
    		      
    572,379
    		      
    40,938
    		      
    230,442
    		      
    235,984
    		      
    696,403
    		      
    2,389,857
    		  
                                                                             
    Business combination
    		    
    -
    		      
    -
    		      
    66,560
    		      
    6,840
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    73,400
    		  
    (Charged)/credited to profit or loss
    		    
    -
    		      
    (502
    )
    		    
    140,969
    		      
    (41,015
    )
    		    
    1,185
    		      
    (25,433
    )
    		    
    (5,128
    )
    		    
    71,610
    		      
    141,686
    		  
    Charged to other comprehensive income
    		    
    (182,400
    )
    		    
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    (182,400
    )
    Currency translation differences
    		    
    -
    		      
    -
    		      
    207
    		      
    -
    		      
    -
    		      
    -
    		      
    132
    		      
    9,670
    		      
    10,009
    		  
                                                                             
    As at 31 December 2016
    		    
    17,476
    		      
    13,915
    		      
    607,154
    		      
    538,204
    		      
    42,123
    		      
    205,009
    		      
    230,988
    		      
    777,683
    		      
    2,432,552
    		  
                                                                             
    Business combination(Note 40)
    		    
    -
    		      
    -
    		      
    -
    		      
    574,600
    		      
    5,052
    		      
    -
    		      
    139,387
    		      
    414,891
    		      
    1,133,930
    		  
    Disposal of subsidiaries(Note 6)
    		    
    -
    		      
    -
    		      
    (10,686
    )
    		    
    (9,962
    )
    		    
    -
    		      
    -
    		      
    (5,566
    )
    		    
    (52,270
    )
    		    
    (78,484
    )
    (Charged)/credited to profit or loss
    		    
    -
    		      
    (493
    )
    		    
    (2,593
    )
    		    
    (70,209
    )
    		    
    7,076
    		      
    (25,433
    )
    		    
    196,613
    		      
    20,026
    		      
    124,987
    		  
    Charged to other comprehensive income
    		    
    (11,905
    )
    		    
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    (11,905
    )
    Currency translation differences
    		    
    -
    		      
    -
    		      
    82
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    3,415
    		      
    3,497
    		  
                                                                             
    As at 31 December 2017
    		    
    5,571
    		      
    13,422
    		      
    593,957
    		      
    1,032,633
    		      
    54,251
    		      
    179,576
    		      
    561,422
    		      
    1,163,745
    		      
    3,604,577
    		  

    Deferred income tax liabilities:
     
       
    Hedging reserve
    		    
    Fair value gains
    		    
    Amortization of land use rights
    		    
    Depreciation
    		    
    Power generation license
    		    
    Mining rights
    		    
    Territorial water use right
    		    
    Others
    		    
    Total
    		  
                                                           
    As at 1 January 2016
    		    
    -
    		      
    (645,242
    )
    		    
    (904,173
    )
    		    
    (1,291,706
    )
    		    
    (625,460
    )
    		    
    (157,215
    )
    		    
    (74,201
    )
    		    
    (121,612
    )
    		    
    (3,819,609
    )
                                                                             
    Business combination
    		    
    -
    		      
    -
    		      
    (10,423
    )
    		    
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    (121,906
    )
    		    
    (132,329
    )
    Credited to profit or loss
    		    
    -
    		      
    -
    		      
    24,948
    		      
    169,088
    		      
    -
    		      
    27,832
    		      
    1,769
    		      
    75,494
    		      
    299,131
    		  
    (Charged)/credited to other comprehensive loss
    		    
    (26,530
    )
    		    
    296,705
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    270,175
    		  
    Currency translation differences
    		    
    8,131
    		      
    -
    		      
    (1,507
    )
    		    
    (26,436
    )
    		    
    (28,903
    )
    		    
    -
    		      
    -
    		      
    -
    		      
    (48,715
    )
                                                                             
    As at 31 December 2016
    		    
    (18,399
    )
    		    
    (348,537
    )
    		    
    (891,155
    )
    		    
    (1,149,054
    )
    		    
    (654,363
    )
    		    
    (129,383
    )
    		    
    (72,432
    )
    		    
    (168,024
    )
    		    
    (3,431,347
    )
                                                                             
    Business combination (Note 40)
    		    
    -
    		      
    (1,736
    )
    		    
    (148,129
    )
    		    
    (3,209,672
    )
    		    
    -
    		      
    -
    		      
    -
    		      
    (96,906
    )
    		    
    (3,456,443
    )
    Disposal of subsidiaries(Note 6)
    		    
    -
    		      
    -
    		      
    1,761
    		      
    22,162
    		      
    -
    		      
    -
    		      
    68,696
    		      
    3,272
    		      
    95,891
    		  
    Credited to profit or loss
    		    
    -
    		      
    -
    		      
    27,457
    		      
    525,780
    		      
    -
    		      
    -
    		      
    1,327
    		      
    45,161
    		      
    599,725
    		  
    (Charged)/credited to other comprehensive loss
    		    
    (5,558
    )
    		    
    348,297
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    -
    		      
    342,739
    		  
    Currency translation differences
    		    
    (304
    )
    		    
    -
    		      
    (540
    )
    		    
    (9,490
    )
    		    
    (11,397
    )
    		    
    -
    		      
    -
    		      
    -
    		      
    (21,731
    )
                                                                             
    As at 31 December 2017
    		    
    (24,261
    )
    		    
    (1,976
    )
    		    
    (1,010,606
    )
    		    
    (3,820,274
    )
    		    
    (665,760
    )
    		    
    (129,383
    )
    		    
    (2,409
    )
    		    
    (216,497
    )
    		    
    (5,871,166
    )
     
    As at 31 December 2017 and 2016, taxable temporary differences relating to interest in equity method investees amounted to RMB2.95 billion and RMB3.39 billion, respectively. No deferred tax liabilities were recognized as at 31 December 2017 and 2016 as dividends from investments in associates and joint ventures are exempted from the PRC income tax and the Company has no plan to dispose any of these investees in the foreseeable future.

    As at 31 December 2017 and 2016, taxable temporary differences relating to the undistributed profit of a wholly-owned foreign subsidiary amounted to RMB3.06 billion and RMB3.54 billion, respectively. No deferred tax liabilities were recognized in respect of the tax that would be payable on the distribution of these retained profit as at 31 December 2017 and 2016 as the Company controls the dividend policy of the subsidiary, and it has been determined that it is probable that the profits will not be distributed in the foreseeable future.

    In accordance with the accounting policy set out in Note 2(u), the Company and its subsidiaries did not recognize deferred income tax assets in respect of certain deductible temporary differences and accumulated tax losses that can be carried forward against future taxable income as follow:
     
       
    As at 31 December
    		  
       
    2017
    		    
    2016
    		  
                 
    Deductible temporary differences
    		    
    4,672,788
    		      
    2,957,316
    		  
    Unused tax losses
    		    
    8,665,079
    		      
    6,669,820
    		  
                     
    Total
    		    
    13,337,867
    		      
    9,627,136
    		  
     
    The expiry dates of the tax losses of the Company and its subsidiaries for which no deferred income tax assets were recognized are summarized as follows:
     
       
    As at 31 December
    		  
       
    2017
    		    
    2016
    		  
                 
    Year of expiry
    		            
    2017
    		    
    -
    		      
    1,841,365
    		  
    2018
    		    
    1,557,045
    		      
    1,122,070
    		  
    2019
    		    
    1,579,066
    		      
    1,195,811
    		  
    2020
    		    
    1,524,531
    		      
    1,061,468
    		  
    2021
    		    
    1,558,573
    		      
    1,449,106
    		  
    2022
    		    
    2,445,864
    		      
    -
    		  
                     
    Total
    		    
    8,665,079
    		      
    6,669,820