DRS 18
Active
Deferred taxes in consolidated financial statements
Latente Steuern
1
Scope – Building on §274 and §306 HGB
Two layers of deferred tax, both elaborated by this standard
DRS 18 supplements TWO distinct HGB deferred-tax provisions this poster series has already documented: §274 HGB (established in the individual-accounts Bilanz poster – the asymmetric mandatory-liability/elective-asset temporary-difference framework), and §306 HGB (established in the Vollkonsolidierung poster – the ADDITIONAL layer of deferred tax specifically arising from consolidation adjustments themselves, such as eliminated intragroup profit sitting on a different tax basis than book basis).
2
The Consolidation-Specific Layer, Elaborated
Why consolidation creates its own temporary differences
Every individual group entity already computes its own §274 deferred tax on its OWN temporary differences. Consolidation ADDS a further layer: adjustments made purely for group-reporting purposes (profit eliminations, fair-value step-ups from capital consolidation, harmonised measurement under §308) create differences between the CONSOLIDATED book value and the entity's own local TAX basis – differences that exist ONLY at the group level, never appearing in any individual entity's own accounts.
DRS 18's own contribution
DRS 18 supplies the detailed methodology for identifying, measuring, and disclosing this consolidation-specific deferred tax layer – including how to handle differing tax rates across jurisdictions within the same group, and how the general HGB deferred-tax measurement approach (established in §274) applies consistently to these group-only temporary differences.
3
The 2021 Tightening (DRÄS 11)
Pulling back from disclosure that had gone beyond the legal minimum
DRÄS 11 (2021) specifically REMOVED certain quantitative disclosure requirements DRS 18 had previously demanded – covering unrecognised deferred tax assets, unused tax loss carryforwards, and unused tax credits – that had gone BEYOND what HGB's own statutory text actually requires. This is a genuinely notable direction of travel: rather than a standard progressively demanding MORE disclosure over time, DRS 18 was deliberately pulled BACK toward closer alignment with the statutory minimum, reflecting the DRSC's own periodic reassessment of whether its recommendations remain proportionate.
4
Worked Example – Group-Level Deferred Tax From Profit Elimination
Deferred tax on an eliminated intragroup profit markup
Recall the intragroup inventory profit elimination scenario this series has used repeatedly: a group eliminates €400,000 of intragroup profit embedded in inventory under §304 HGB. The subsidiary that originally recorded this profit pays local tax at a 25% rate on its own individual results, which still INCLUDE that markup for tax purposes.
Under DRS 18, the group recognises a DEFERRED TAX ASSET of €400,000 × 25% = €100,000 – reflecting that the group's own CONSOLIDATED profit is €400,000 lower than the sum of each entity's own individually-taxed profit, a temporary difference that will reverse once the inventory is genuinely sold to a third party outside the group.
5
Relationship to IFRS (IAS 12)
Broadly converged in mechanics, differing in scope of recognition
DRS 18's consolidation-specific deferred tax approach broadly parallels IAS 12's own treatment of temporary differences arising on consolidation. The main persistent divergence traces back to §274 itself: HGB's own asymmetric ELECTIVE deferred tax asset recognition (versus IAS 12's MANDATORY recognition, subject to recoverability) carries through into the consolidation-specific layer DRS 18 addresses, exactly as this series flagged when covering §274 in the very early HGB posters.