KT CORP (ifrs-full:DisclosureOfIncomeTaxExplanatory)

28.

Deferred Income Tax and Income Tax Expense

The analysis of deferred tax assets and deferred tax liabilities as of December 31, 2016 and 2017, is as follows:


(In millions of Korean won)	2016			2017
Deferred tax assets
Deferred tax assets to be recovered within 12 months	￦	265,997		￦	318,339
Deferred tax assets to be recovered after more than 12 months		1,124,420			1,140,252

	￦	1,390,417		￦	1,458,591

Deferred tax liabilities
Deferred tax liability to be recovered within 12 months		(48,033	)		(15,705	)
Deferred tax liability to be recovered after more than 12 months		(778,655	)		(859,126	)

		(826,688	)		(874,831	)

Deferred tax assets after offsetting	￦	701,409		￦	712,222

Deferred tax liabilities after offsetting	￦	137,680		￦	128,462

The gross movements on the deferred income tax account for the years ended December 31, 2016 and 2017, are calculated as follows:


(In millions of Korean won)	2016			2017
Beginning	￦	715,747		￦	563,729
Charged(credited) to the statement of profit or loss		(152,102	)		(1,771	)
Charged(credited) to othercomprehensive income		84			21,802

Ending	￦	563,729		￦	583,760

The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:


(In millions of Korean won)	2016
	Beginning			Statement of operations			Other comprehensive income			Ending
Deferred tax liabilities
Derivative instruments	￦	(19,155	)	￦	(33,569	)	￦	3,536		￦	(49,188	)
Available-for-sale financial assets		(29,430	)		(10	)		(2,262	)		(31,702	)
Investment in subsidiaries, associates and joint ventures		(50,235	)		(666	)		155			(50,746	)
Depreciation		(53,872	)		14,374			—			(39,498	)
Advanced depreciation provision		(231,692	)		6,005			—			(225,687	)
Deposits for severance benefits		(251,924	)		(55,806	)		—			(307,730	)
Accrued income		(1,808	)		(216	)		—			(2,024	)
Reserve for technology and human resource development		(1,216	)		469			—			(747	)
Others		(135,802	)		16,436			—			(119,366	)

		(775,134	)		(52,983	)		1,429			(826,688	)

Deferred tax assets
Provisions for impairment on trade receivables		136,743			(26,467	)		—			110,276
Inventory valuation		56			(8	)		—			48
Contribution for construction		19,618			(1,527	)		—			18,091
Accrued expenses		64,117			16,239			—			80,356
Provisions		20,353			(132	)		—			20,221
Property, plant and equipment		239,791			(6,876	)		—			232,915
Retirement benefit obligations		331,980			41,857			(1,345	)		372,492
Withholding of facilities expenses		7,360			(450	)		—			6,910
Accrued payroll expenses		21,634			4,281			—			25,915
Deduction of installment receivables		10,513			3,374			—			13,887
Assets retirement obligation		16,974			1,112			—			18,086
Gain or loss foreign currency translation		43,283			24,418			—			67,701
Deferred revenue		43,792			(17,679	)		—			26,113
Real-estate sales		2,980			871			—			3,851


(In millions of Korean won)	2016
	Beginning		Statement of operations			Other comprehensive income			Ending
Tax credit carryforwards		212,820		(13,221	)		—			199,599
Accumulated deficit		107,485		(107,485	)		—			—
Others		211,382		(17,426	)		—			193,956

		1,490,881		(99,119	)		(1,345	)		1,390,417

Net balance	￦	715,747	￦	(152,102	)	￦	84		￦	563,729


(In millions of Korean won)	2017
	Beginning			Statement of operations			Other comprehensive income			Ending
Deferred tax liabilities
Derivative instruments	￦	(49,188	)	￦	49,188		￦	—		￦	—
Available-for-sale financial assets		(31,702	)		(164	)		1,346			(30,520	)
Investment in subsidiaries, associates and joint ventures		(50,746	)		(42,659	)		(3,245	)		(96,650	)
Depreciation		(39,498	)		39,498			—			—
Advanced depreciation provision		(225,687	)		(22,905	)		—			(248,592	)
Deposits for severance benefits		(307,730	)		(80,126	)		—			(387,856	)
Accrued income		(2,024	)		(126	)		—			(2,150	)
Reserve for technology and human resource development		(747	)		433			—			(314	)
Others		(119,366	)		10,617			—			(108,749	)

		(826,688	)		(46,244	)		(1,899	)		(874,831	)

Deferred tax assets
Derivative instruments		—			34,572			(9,848	)		24,724
Provisions for impairment on trade receivables		110,276			11,380			—			121,656
Inventory valuation		48			(48	)		—			—
Contribution for construction		18,091			180			—			18,271
Accrued expenses		80,356			10,683			—			91,039
Provisions		20,221			3,858			—			24,079
Property, plant and equipment		232,915			(841	)		—			232,074
Retirement benefit obligations		372,492			67,751			26,806			467,049
Withholding of facilities expenses		6,910			472			—			7,382
Accrued payroll expenses		25,915			(10,786	)		—			15,129
Deduction of installment receivables		13,887			(13,887	)		—			—
Assets retirement obligation		18,086			2,750			—			20,836
Gain or loss foreign currency translation		67,701			(67,558	)		—			143
Deferred revenue		26,113			221			—			26,334
Real-estate sales		3,851			4,847			—			8,698
Tax credit carryforwards		199,599			(48,823	)		—			150,776
Deficit carried over		—			2,699			—			2,699


(In millions of Korean won)	2017
	Beginning		Statement of operations			Other comprehensive income		Ending
Others		193,956		47,003			6,743		247,702

		1,390,417		44,473			23,701		1,458,591

Net balance	￦	563,729	￦	(1,771	)	￦	21,802	￦	583,760

The tax impacts recognized directly to equity as of December 31, 2015, 2016 and 2017, are as follows:


	2015									2016									2017
(In millions of Korean won)	Before recognition			Tax effect			After recognition			Before recognition			Tax effect			After recognition			Before recognition			Tax effect			After recognition
Available-for-sale valuation gain(loss)	￦	(47,515	)	￦	11,499		￦	(36,016	)	￦	9,347		￦	(2,262	)	￦	7,085		￦	(5,561	)	￦	1,346		￦	(4,215	)
Hedge instruments valuation gain(loss)		18,406			(4,454	)		13,952			(14,611	)		3,536			(11,075	)		40,694			(9,848	)		30,846
Remeasurements from net defined benefit liabilities		(49,963	)		12,091			(37,872	)		5,558			(1,345	)		4,213			(110,768	)		26,806			(83,962	)
Shares of gain(loss) of associates and joint ventures		(5,297	)		1,282			(4,015	)		(641	)		155			(486	)		13,410			(3,245	)		10,165
Foreign currency translation adjustment		(6,443	)		1,559			(4,884	)		(7,133	)		1,726			(5,407	)		(27,865	)		6,743			(21,122	)

Total	￦	(90,812	)	￦	21,977		￦	(68,835	)	￦	(7,480	)	￦	1,810		￦	(5,670	)	￦	(90,090	)	￦	21,802		￦	(68,288	)

Details of income tax expense(benefit) for the years ended December 31, 2015, 2016 and 2017, are calculated as follows:


(In millions of Korean won)	2015			2016		2017
Current income tax expense(benefit)	￦	(5,003	)	￦	176,212	￦	268,885
Impact of change in deferred taxes		232,134			152,102		1,771

Income tax expense	￦	227,131		￦	328,314	￦	270,656

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the entities as follows:


	2015			2016			2017
Profit before income tax expense	￦	710,741		￦	1,123,431		￦	816,997

Statutory income tax expense	￦	171,999		￦	271,870		￦	197,251
Tax effect
Income not taxable for taxation purposes		(21,881	)		(28,093	)		(19,268	)
Non-deductible expenses		28,849			21,947			39,746
Tax credit		(9,660	)		(13,764	)		(27,211	)
Additional payment of income taxes		997			(4,780	)		976
Tax effect and adjustment on consolidation
Goodwill impairment		23,185			31,847			20,475
Eliminated dividend income form subsidiaries		20,452			40,087			34,305
Changes of out-side tax effect		9,844			(567	)		17,990
Others		3,346			9,767			6,392

Income tax expense	￦	227,131		￦	328,314		￦	270,656

KT CORP | CIK:0000892450 |

ifrs-full:DisclosureOfIncomeTaxExplanatory