PERNOD-RICARD - URD 2021-22 EN

Annual consolidated financial statements Notes to the consolidated financial statements

Deferred tax is recognised on time differences between the tax and book values of assets and liabilities in the consolidated balance sheet and is measured using the balance sheet approach. Deferred taxes relating to right-of-use assets and lease liabilities are recognised on a net basis. The effects of changes in tax rates are recognised in shareholder equity or in profit and loss in the year in which the change of tax rates is decided. Deferred tax assets are recognised in the balance sheet when it is more likely than not that they will be recovered in future years. Deferred tax assets and liabilities are not discounted to present value. In order to evaluate the Group’s ability to recover these assets, particular account is taken of forecasts of future taxable profits. Deferred tax assets relating to tax loss carryforwards are only reported when they are likely to be recovered, based on projections of taxable income calculated by the Group at the end of each financial year. All assumptions used, including, in particular, growth in operating profit and financial income (expenses), taking into account interest rates, are updated by the Group at the reporting date based on data determined by the relevant senior management.

Deferred taxes are broken down by nature as follows:

30.06.2022

30.06.2021

€ million

Margins in inventories

111

180

Fair value adjustments on assets and liabilities

13

20 65

Provisions for pension benefits

78

Deferred tax assets related to losses eligible for carryforwards

913

1,028

Provisions (other than provisions for pensions benefits) and other items

509

551

Total deferred tax assets

1,623

1,844

Accelerated tax depreciation

175

190

Fair value adjustments on assets and liabilities

2,469

2,734

Pension and other hedging assets

181

215

Total deferred tax liabilities

2,825

3,139

Tax loss carryforwards (recognised and unrecognised) represented potential tax savings of €1,298 million at 30 June 2022 and €1,154 million at 30 June 2021. The potential tax savings at 30 June 2022 and 30 June 2021 relate to tax loss carryforwards with the following expiry dates:

6.

FY21

Tax effect of loss carryforwards € million

Years

Losses recognised Losses not recognised

2021 2022 2023 2024

0 0

1

2

2 2

4

2

2025 and after No expiry date

727 182

189

43

Total

913

241

FY22

Tax effect of loss carryforwards € million

Losses recognised Losses not recognised

Years

2022 2023 2024 2025

0 0 0

2

4 5

1

2

2026 and after No expiry date

836

226

191

31

Total

1,028

270

213

Pernod Ricard Universal Registration Document 2021-2022