GlaxoSmithKline PLC (GSK) | Analysis of Income Taxes

Income Tax Accounting Policy

Current tax is provided at the amounts expected to be paid applying tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is provided using rates of tax that have been enacted or substantively enacted by the balance sheet date. Deferred tax liabilities and assets are not discounted.

Source: GlaxoSmithKline PLC, Annual Report

Income Tax Expense (Benefit)

GlaxoSmithKline PLC, income tax expense (benefit), continuing operations

Source: Based on data from GlaxoSmithKline PLC Annual Reports

Item	Description	The company
Current taxation	The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable income (loss) from continuing operations.	GlaxoSmithKline PLC's current taxation declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
Deferred taxation	The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations.	GlaxoSmithKline PLC's deferred taxation increased from 2009 to 2010 and from 2010 to 2011.
Taxation	The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to pretax income (loss) from continuing operations; income tax expense (benefit) may include interest and penalties on tax uncertainties based on the entity's accounting policy.	GlaxoSmithKline PLC's taxation declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.

Deferred Tax Assets (Liabilities), Net

GlaxoSmithKline PLC, deferred tax assets (liabilities), net

Source: Based on data from GlaxoSmithKline PLC Annual Reports

Item	Description	The company
Deferred tax assets	The aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; net of deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value.	GlaxoSmithKline PLC's deferred tax assets increased from 2009 to 2010 and from 2010 to 2011.
Deferred tax assets (liabilities), net	For entities that net deferred tax assets and tax liabilities, represents the unclassified net amount of deferred tax assets and liabilities as of the balance sheet date, which result from applying the applicable enacted tax rate to net temporary differences and carryforwards pertaining to assets or liabilities. A temporary difference is a difference between the tax basis of an asset or liability and its carrying amount in the financial statements prepared in accordance with generally accepted accounting principles that will reverse in ensuing periods.	GlaxoSmithKline PLC's deferred tax assets (liabilities), net increased from 2009 to 2010 and from 2010 to 2011.