IBERSOL | Annual Report 2021

CONSOLIDATED FINANCIAL STATEMENTS Deferred taxes are recognized globally using the liability method and calculated on temporary differences arising from the difference between the tax base of assets and liabilities and their values ​in the consolidated financial statements. However, if deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination or that at the date of the transaction does not affect either the accounting result or the tax result, it is not accounted for. Deferred taxes are determined by the tax rates (and legal) enacted or substantially enacted on the date of the consolidated statement of financial position and which are ex- pected to be applicable in the period of realization of deferred tax assets or settle- ment of deferred tax liabilities. Deferred tax assets are recognized to the extent that it is probable that future tax- able profits will be available to use the temporary difference. The Group offsets deferred tax assets and deferred tax liabilities if, and only if: a) has a right of mandatory compliance to offset current tax assets against current tax liabilities; and b) deferred tax assets and deferred tax liabilities relate to income taxes assessed by the same tax authority on or: i) the same taxable entity, or ii) different taxable entities that intend to either settle current tax liabilities and assets on a net basis, or realize the assets and settle the liabilities simultaneously, in each future period in which the significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. 2.17 PROVISIONS AND CONTINGENT ASSETS AND LIABILITIES Contingent liabilities are defined by the Company as (i) possible obligations arising from past events and whose existence will only be confirmed by the occurrence or not of one or more uncertain future events not wholly under the control of the Company or (ii) present obligations Which arise from past events but are not recog- nized because it is not probable that an outflow of resources embodying economic benefits is required to settle the obligation or the amount of the obligation can not be measured reliably. Contingent liabilities are not recognized in the Company’s financial statements and are disclosed in these Notes to the Financial Statements, unless the possibility of an outflow of funds affecting future economic benefits is remote, in case they are not even disclosed. Contingent assets are possible assets that arise from past events and whose exist- ence will only be confirmed by the occurrence or not of one or more uncertain future events not wholly under the control of the Company. Contingent assets are not recognized in the Company’s financial statements but are disclosed in these Notes to the Financial Statements when it is probable that there will be a future economic benefit. 352