KB Financial Group Inc. | CIK:0001445930 | 3

  • Filed: 4/27/2018
  • Entity registrant name: KB Financial Group Inc. (CIK: 0001445930)
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    • ifrs-full:DisclosureOfDeferredTaxesExplanatory

    16. Deferred Income Tax Assets and Liabilities

    Details of deferred income tax assets and liabilities as of December 31, 2016 and 2017, are as follows:

     

         2016  
         Assets     Liabilities     Net amount  
         (In millions of Korean won)  

    Other provisions

    		    ￦ 91,201     ￦ —       ￦ 91,201  

    Allowances for loan losses

    		      7,297       —         7,297  

    Impairment losses on property and equipment

    		      7,920       (359 )      7,561  

    Interest on equity index-linked deposits

    		      41       —         41  

    Share-based payments

    		      13,709       —         13,709  

    Provisions for guarantees

    		      30,569       —         30,569  

    Losses(gains) from valuation on derivative financial instruments

    		      9,761       (46,765 )      (37,004 ) 

    Present value discount

    		      11,358       (6,160 )      5,198  

    Losses(gains) from fair value hedged item

    		      —         (14,335 )      (14,335 ) 

    Accrued interest

    		      —         (84,676 )      (84,676 ) 

    Deferred loan origination fees and costs

    		      1,247       (158,914 )      (157,667 ) 

    Gains from revaluation

    		      803       (286,119 )      (285,316 ) 

    Investments in subsidiaries and others

    		      12,014       (109,925 )      (97,911 ) 

    Gains on valuation of security investment

    		      109,071       (8,279 )      100,792  

    Defined benefit liabilities

    		      319,467       —         319,467  

    Accrued expenses

    		      273,092       —         273,092  

    Retirement insurance expense

    		      —         (283,771 )      (283,771 ) 

    Adjustments to the prepaid contributions

    		      —         (15,142 )      (15,142 ) 

    Derivative-linked securities

    		      30,102       (42,825 )      (12,723 ) 

    Others

    		      365,616       (195,856 )      169,760  
      

     

     

    		    

     

     

    		    

     

     

    		  

    Sub-total

    		      1,283,268       (1,253,126 )      30,142  
      

     

     

    		    

     

     

    		    

     

     

    		  

    Offsetting of deferred income tax assets and liabilities

    		      (1,149,644 )      1,149,644       —    
      

     

     

    		    

     

     

    		    

     

     

    		  

    Total

    		    ￦ 133,624     ￦ (103,482 )    ￦ 30,142  
      

     

     

    		    

     

     

    		    

     

     

    		  

     

         2017  
         Assets     Liabilities     Net amount  
         (In millions of Korean won)  

    Other provisions

    		    ￦ 115,518     ￦ —       ￦ 115,518  

    Allowances for loan losses

    		      1,142       —         1,142  

    Impairment losses on property and equipment

    		      36,598       (407 )      36,191  

    Interest on equity index-linked deposits

    		      43       —         43  

    Share-based payments

    		      23,238       —         23,238  

    Provisions for guarantees

    		      24,341       —         24,341  

    Losses(gains) from valuation on derivative financial instruments

    		      6,258       (17,479 )      (11,221 ) 

    Present value discount

    		      25,332       (4,498 )      20,834  

    Losses(gains) from fair value hedged item

    		      —         (15,698 )      (15,698 ) 

    Accrued interest

    		      243       (111,514 )      (111,271 ) 

    Deferred loan origination fees and costs

    		      332       (180,401 )      (180,069 ) 

    Advanced depreciation provision

    		      —         (1,703 )      (1,703 ) 

    Gains from revaluation

    		      648       (350,801 )      (350,153 ) 

    Investments in subsidiaries and others

    		      24,834       (103,268 )      (78,434 ) 

    Gains on valuation of security investment

    		      86,290       (225,158 )      (138,868 ) 

    Defined benefit liabilities

    		      436,706       —         436,706  

    Accrued expenses

    		      194,399       —         194,399  

    Retirement insurance expense

    		      —         (369,300 )      (369,300 ) 

    Adjustments to the prepaid contributions

    		      —         (16,236 )      (16,236 ) 

    Derivative-linked securities

    		      27,992       (5,679 )      22,313  

    Others

    		      321,453       (452,303 )      (130,850 ) 
      

     

     

    		    

     

     

    		    

     

     

    		  

    Sub-total

    		      1,325,367       (1,854,445 )      (529,078 ) 
      

     

     

    		    

     

     

    		    

     

     

    		  

    Offsetting of deferred income tax assets and liabilities

    		      (1,321,376 )      1,321,376       —    
      

     

     

    		    

     

     

    		    

     

     

    		  

    Total

    		    ￦ 3,991     ￦ (533,069 )    ￦ (529,078 ) 
      

     

     

    		    

     

     

    		    

     

     

    		  

    Unrecognized deferred income tax assets

    No deferred income tax assets have been recognized for the deductible temporary difference of ￦49,179 million associated with investments in subsidiaries and others as of December 31, 2017, because it is not probable that the temporary differences will be reversed in the foreseeable future.

    No deferred income tax assets have been recognized for deductible temporary differences of ￦80,204 million and ￦112,030 million associated with SPE repurchase and others, respectively, as of December 31, 2017, due to the uncertainty that these will be realized in the future.

    Unrecognized deferred income tax liabilities

    No deferred income tax liabilities have been recognized for the taxable temporary difference of ￦28,407 million associated with investment in subsidiaries and associates as of December 31, 2017, due to the following reasons:

     

      •   The Group is able to control the timing of the reversal of the temporary difference.

     

      •   It is probable that the temporary difference will not be reversed in the foreseeable future.

    No deferred income tax liabilities have been recognized as of December 31, 2017, for the taxable temporary difference of ￦65,288 million arising from the initial recognition of goodwill from the merger of Housing and Commercial Bank in 2001.

     

    The changes in cumulative temporary differences for the years ended December 31, 2016 and 2017, are as follows:

     

         2016  
         Beginning     Decrease     Increase     Ending  
         (In millions of Korean won)  

    Deductible temporary differences

    		         

    Losses(gains) from fair value hedged item

    		    ￦ 11,882     ￦ 11,882     ￦ —       ￦ —    

    Other provisions

    		      449,239       466,913       398,537       380,863  

    Allowances for loan losses

    		      5,079       26,492       51,567       30,154  

    Impairment losses on property and equipment

    		      21,476       31,914       43,164       32,726  

    Deferred loan origination fees and costs

    		      23,491       24,937       6,600       5,154  

    Interest on equity index-linked deposits

    		      287       287       168       168  

    Share-based payments

    		      44,922       39,600       51,328       56,650  

    Provisions for guarantees

    		      157,954       157,954       126,319       126,319  

    Gains(losses) from valuation on derivative financial instruments

    		      118,745       180,332       101,921       40,334  

    Present value discount

    		      42,288       14,693       19,366       46,961  

    Loss on SPE repurchase

    		      80,204       —         —         80,204  

    Investments in subsidiaries and others

    		      821,059       59,354       49,014       810,719  

    Gains on valuation of security investment

    		      298,796       394,580       543,172       447,388  

    Defined benefit liabilities

    		      1,153,686       75,269       241,718       1,320,135  

    Accrued expenses

    		      271,463       358,583       1,215,612       1,128,492  

    Derivative linked securities

    		      3,090,264       3,098,449       132,573       124,388  

    Others

    		      1,220,133       557,068       739,581       1,402,646  
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Sub-total

    		      7,810,968     ￦ 5,498,307     ￦ 3,720,640       6,033,301  
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Unrecognized deferred income tax assets:

    		         

    Other provisions

    		      67           —    

    Loss on SPE repurchase

    		      80,204           80,204  

    Investments in subsidiaries and others

    		      797,862           774,259  

    Others

    		      170,214           119,334  
      

     

     

    		        

     

     

    		  

    Total

    		      6,762,621           5,059,504  

    Tax rate (%)1

    		      24.2           24.2  
      

     

     

    		        

     

     

    		  

    Total deferred income tax assets from deductible temporary differences

    		    ￦ 1,636,968         ￦ 1,283,268  
      

     

     

    		        

     

     

    		  

    Taxable temporary differences

    		         

    Losses(gains) from fair value hedged item

    		    ￦ —       ￦ —       ￦ (59,235 )    ￦ (59,235 ) 

    Accrued interest

    		      (338,402 )      (333,121 )      (344,618 )      (349,899 ) 

    Impairment losses on property and equipment

    		      (1,481 )      —         —         (1,481 ) 

    Deferred loan origination fees and costs

    		      (629,161 )      (649,107 )      (680,891 )      (660,945 ) 

    Gains(losses) from valuation on derivative financial instruments

    		      (128,985 )      (457,371 )      (521,629 )      (193,243 ) 

    Present value discount

    		      (37,741 )      (38,009 )      (25,722 )      (25,454 ) 

    Goodwill

    		      (65,288 )      —         —         (65,288 ) 

    Gains on revaluation

    		      (1,136,143 )      (61,094 )      (107,261 )      (1,182,310 ) 

    Investments in subsidiaries and others

    		      (408,490 )      (68,158 )      (46,935 )      (387,267 ) 

    Gains on valuation of security investment

    		      (93,510 )      (114,227 )      (57,969 )      (37,252 ) 

    Retirement insurance expense

    		      (996,448 )      (63,979 )      (238,045 )      (1,170,514 ) 

    Adjustments to the prepaid contributions

    		      (90,653 )      (90,653 )      (62,569 )      (62,569 ) 

    Derivative linked securities

    		      (3,222,110 )      (3,401,273 )      (356,125 )      (176,962 ) 

    Others

    		      (426,328 )      (663,284 )      (1,031,097 )      (794,141 ) 
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Sub-total

    		      (7,574,740 )    ￦ (5,940,276 )    ￦ (3,532,096 )      (5,166,560 ) 
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Unrecognized deferred income tax assets:

    		         

    Goodwill

    		      (65,288 )          (65,288 ) 

    Investments in subsidiaries and others

    		      (66,345 )          (17,205 ) 

    Others

    		      (1,914 )          (906 ) 
      

     

     

    		        

     

     

    		  

    Total

    		      (7,441,193 )          (5,083,161 ) 

    Tax rate (%)1

    		      24.2           24.2  
      

     

     

    		        

     

     

    		  

    Total deferred income tax assets from deductible temporary differences

    		    ￦ (1,807,838 )        ￦ (1,253,126 ) 
      

     

     

    		        

     

     

    		  

     

    1  The rate of 24.2% has been applied for the deferred tax assets and liabilities expected to be utilized.

     

         2017  
         Beginning     Business
    Combination    		     Decrease     Increase     Ending  
         (In millions of Korean won)  

    Deductible temporary differences

    		           

    Other provisions

    		    ￦ 380,863     ￦ 30,180     ￦ 395,138     ￦ 407,923     ￦ 423,828  

    Allowances for loan losses

    		      30,154       —         26,134       202       4,222  

    Impairment losses on property and equipment

    		      32,726       107,755       139,743       132,346       133,084  

    Deferred loan origination fees and costs

    		      5,154       —         5,154       1,207       1,207  

    Interest on equity index-linked deposits

    		      168       —         168       155       155  

    Share-based payments

    		      56,650       —         49,333       77,185       84,502  

    Provisions for guarantees

    		      126,319       —         126,319       88,512       88,512  

    Gains(losses) from valuation on derivative financial instruments

    		      40,334       —         40,334       22,758       22,758  

    Present value discount

    		      46,961       —         18,417       63,573       92,117  

    Loss on SPE repurchase

    		      80,204       —         —         —         80,204  

    Investments in subsidiaries and others

    		      810,719       —         753,918       76,902       133,703  

    Gains on valuation of security investment

    		      447,388       —         447,388       299,082       299,082  

    Defined benefit liabilities

    		      1,320,135       255,375       256,580       271,857       1,590,787  

    Accrued expenses

    		      1,128,492       —         1,123,713       701,756       706,535  

    Derivative linked securities

    		      124,388       —         124,388       101,789       101,789  

    Others

    		      1,402,646       —         629,002       501,901       1,275,545  
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Sub-total

    		      6,033,301       393,310     ￦ 4,135,729     ￦ 2,747,148       5,038,030  
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Unrecognized deferred income tax assets:

    		           

    Other provisions

    		      —         —             2,879  

    Loss on SPE repurchase

    		      80,204       —             80,204  

    Investments in subsidiaries and others

    		      774,259       —             49,179  

    Others

    		      119,334       —             112,030  
      

     

     

    		    

     

     

    		        

     

     

    		  

    Total

    		      5,059,504       393,310           4,793,738  

    Tax rate (%)1

    		      24.2       24.2           27.5  
      

     

     

    		    

     

     

    		        

     

     

    		  

    Total deferred income tax assets from deductible temporary differences

    		    ￦ 1,283,268     ￦ 95,181         ￦ 1,325,367  
      

     

     

    		    

     

     

    		        

     

     

    		  

    Taxable temporary differences

    		           

    Losses(gains) from fair value hedged item

    		    ￦ (59,235 )    ￦ —       ￦ (59,235 )    ￦ (57,083 )    ￦ (57,083 ) 

    Accrued interest

    		      (349,899 )      (72,117 )      (377,010 )      (360,536 )      (405,542 ) 

    Impairment losses on property and equipment

    		      (1,481 )      —         —         —         (1,481 ) 

    Deferred loan origination fees and costs

    		      (660,945 )      (15,846 )      (665,209 )      (657,081 )      (668,663 ) 

    advanced depreciation provision

    		      —         (6,192 )      —         —         (6,192 ) 

    Gains(losses) from valuation on derivative financial instruments

    		      (193,243 )      —         (192,491 )      (61,077 )      (61,829 ) 

    Present value discount

    		      (25,454 )      (8,766 )      (34,220 )      (16,357 )      (16,357 ) 

    Goodwill

    		      (65,288 )      —         —         —         (65,288 ) 

    Gains on revaluation

    		      (1,182,310 )      (99,244 )      (59,030 )      (53,117 )      (1,275,641 ) 

    Investments in subsidiaries and others

    		      (387,267 )      —         (72,284 )      (72,484 )      (387,467 ) 

    Gains on valuation of security investment

    		      (37,252 )      (236,137 )      (273,171 )      (764,891 )      (765,109 ) 

    Retirement insurance expense

    		      (1,170,514 )      (168,714 )      (200,722 )      (203,506 )      (1,342,012 ) 

    Adjustments to the prepaid contributions

    		      (62,569 )      —         (61,034 )      (57,505 )      (59,040 ) 

    Derivative linked securities

    		      (176,962 )      —         (176,962 )      (20,650 )      (20,650 ) 

    Others

    		      (794,141 )      (1,215,733 )      (429,645 )      (95,568 )      (1,675,797 ) 

    Sub-total

    		      (5,166,560 )      (1,822,749 )    ￦ (2,601,013 )    ￦ (2,419,855 )      (6,808,151 ) 
      

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		    

     

     

    		  

    Unrecognized deferred income tax assets:

    		           

    Goodwill

    		      (65,288 )      —             (65,288 ) 

    Investments in subsidiaries and others

    		      (17,205 )      (4,546 )          (28,407 ) 

    Others

    		      (906 )      —             (677 ) 
      

     

     

    		    

     

     

    		        

     

     

    		  

    Total

    		      (5,083,161 )      (1,818,203 )          (6,713,779 ) 

    Tax rate (%)1

    		      24.2       24.2           27.5  
      

     

     

    		    

     

     

    		        

     

     

    		  

    Total deferred income tax assets from deductible temporary differences

    		    ￦ (1,253,126 )    ￦ (442,206 )        ￦ (1,854,445 ) 
      

     

     

    		    

     

     

    		        

     

     

    		  

     

    1  The corporate tax rate was changed due to the amendment of corporate tax law in 2017. Accordingly, the rate of 27.5% has been applied for the deferred tax assets and liabilities expected to be utilized in periods after December 31, 2017.