bat plc annual report 2007 - Notes on the accounts: Notes 13-15

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13 Deferred tax

Deferred tax assets comprise:

Deferred tax liabilities comprise:

The net deferred tax liabilities are reflected in the Balance Sheet as follows, after offsetting assets and liabilities where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred income taxes relate to the same fiscal authority.

Deferred tax expected to be recovered within 12 months:

At the balance sheet date, the Group has recognised and unrecognised deferred tax assets in respect of unused tax losses of £191 million (2006: £144 million) available for offset against future profits. A deferred tax asset has been recognised in respect of £22 million (2006: £32 million) of such losses, as realisation of the related tax benefit is probable.

Unrecognised deferred tax assets in respect of unused income tax losses of £101 million (2006: £67 million) have no expiry date and unused income tax losses of £64 million (2006: £35 million) expire after five years. Unrecognised deferred tax assets in respect of unused capital tax losses of £4 million (2006: £10 million) have no expiry date.

At the balance sheet date, the Group has unrecognised deferred tax assets in respect of deductible temporary differences of £158 million (2006: £183 million) and unused tax credits of £206 million (2006: £136 million). These unrecognised deferred tax assets have no expiry period.

At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised was £5 billion in both years. No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future.

14 Trade and other receivables

Prepayments and accrued income include £53 million (2006: £48 million) in respect of dividends from associates and £11 million (2006: £1 million) in respect of interest.

Trade and other receivables have been reported in the Balance Sheet net of allowances as follows:

The movements in the allowance account are as follows:

Impairment of trade receivables charged during the year is included as part of other operating expenses. For 2007, the net impairment charged was £37 million (2006: £17 million) of which £19 million (2006: £17 million), is reflected in the above table.

As at 31 December 2007, trade and other receivables of £63 million (2006: £42 million) were past due but not impaired. These relate to a number of external parties where there is no expectation of default. The age analysis of these trade receivables is as follows:

The Group holds bank guarantees, other guarantees and credit insurance in respect of some of the past due debtor balances.

Trade and other receivables are predominantly denominated in the functional currencies of subsidiary undertakings apart from the following:

Trade and other receivables also include certain interest bearing amounts and their effective interest rates are as follows:

*2006 includes US$100 million (£51 million) collateral pledged representing a bond posted in connection with the Engle class action in the US (note 30)

There is no material difference between the above amounts for trade and other receivables and their fair value, due to the short term duration of the majority of trade and other receivables. There is no concentration of credit risk with respect to trade receivables as the Group has a large number of customers, internationally dispersed.

15 Available-for-sale investments

Investments have the following maturities:

The contractual gross maturities in each year include the investments maturing in that year together with forecast interest receipts on all investments which are due for all or part of that year.

Investments are denominated in the functional currency of the subsidiary undertaking or other currencies as shown below:

Non-equity investments are denominated in the following currencies:

Effective interest rates applicable to non-equity investments are as follows:

The fair values of available-for-sale investments are principally based on readily observable market data with the exception of an equity investment in an unquoted entity which is valued at £18 million (2006: £17 million) using the discounted cash flows of estimated future dividends.