The following table details changes in deferred tax assets and liabilities by type of timing difference and calculated based on the tax rates established by applicable regulations, as well as the amount of deferred tax assets offsettable, where permitted, with deferred tax liabilities.
|Millions of euro||Increase/ (Decrease) taken to profit or loss||Increase/ (Decrease) taken to equity||Change in the consolidation scope||Exchange differences||Other changes||Reclassifications of assets held for sale|
|at Dec. 31, 2019||at Dec. 31, 2020|
|Deferred tax assets:|
|- differences in the carrying amount of intangible assets, property, plant and equipment||2,372||(259)||-||15||(34)||29||-||2,123|
|- accruals to provisions for risks and charges and impairment losses with deferred deductibility||1,702||226||-||-||(162)||(41)||-||1,725|
|- tax loss carried forward||502||70||-||-||(113)||49||-||508|
|- measurement of financial instruments||786||(22)||(189)||-||(5)||8||(17)||561|
|- employee benefits||1,086||(211)||163||-||(145)||5||-||898|
|- other items||2,664||265||1||-||(88)||(79)||-||2,763|
|Deferred tax liabilities:|
|- differences on non-current and financial assets||6,093||(181)||-||24||(459)||(19)||(16)||5,442|
|- measurement of financial instruments||481||55||(100)||-||(18)||52||-||470|
|- other items||1,740||306||(3)||-||(149)||(9)||-||1,885|
|Non-offsettable deferred tax assets||4,637|
|Non-offsettable deferred tax liabilities||3,078|
|Excess net deferred tax liabilities after any offsetting||778|
Deferred tax assets recognized at December 31, 2020, as the generation of sufficient future taxable income to recovery such assets is considered highly likely, totaled €8,578 million (€9,112 million at December 31, 2019).
Deferred tax assets during the year decreased by €534 million, essentially due to unfavorable exchange rate developments in Latin America, reversals of deferred tax assets on differences in the carrying amount of non-current assets, mainly in Italy and Spain, a decrease in deferred tax assets linked to developments in the fair value of cash flow hedge derivatives and the recognition of the tax effects relating to the reversal of the electricity discount provision in Spain. These effects were partially offset by the deferred tax assets recognized on the increase in provisions for early retirement incentives in Italy and Spain.
It should also be noted that deferred tax assets (in the amount of €205 million) were not recorded in relation to prior tax losses in the amount of €769 million because, on the basis of current estimates of future taxable income, it is not highly likely that such assets will be recovered.
Deferred tax liabilities amounted to €7,797 million at December 31, 2020 (€8,314 million at December 31, 2019). They essentially include the determination of the tax effects of the adjustments to assets acquired as part of the final allocation of the cost of acquisitions made in the various years and the deferred taxation in respect of the differences between depreciation charged for tax purposes, including accelerated depreciation, and depreciation based on the estimated useful lives of assets.
Deferred tax liabilities decreased by a total of €517 million due, in particular, to adverse exchange rate developments in Latin America and reversals associated with write-downs of a number of coal-fired plants in Italy, Spain and Chile.