KOREA ELECTRIC POWER CORP | CIK:0000887225 |

Filed: 4/30/2018

Entity registrant name: KOREA ELECTRIC POWER CORP (CIK: 0000887225)

Generator: Fujitsu

SEC filing page: http://www.sec.gov/Archives/edgar/data/887225/000119312518141125/0001193125-18-141125-index.htm

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ifrs-full:DisclosureOfIncomeTaxExplanatory

41.

Income Taxes

(1)

Income tax expense for the years ended December 31, 2015, 2016 and 2017 are as follows:


		2015			2016			2017
		In millions of won
Current income tax expense
Payment of income tax	￦		2,682,779			2,689,640			881,583
Adjustment due to changes in estimates related to prior years			(23,248	)		231,113			4,484
Current income tax directly recognized in equity			37,768			30,059			(56,098	)

			2,697,299			2,950,812			829,969

Deferred income tax expense
Generation and realization of temporary differences			48,878			509,762			1,283,012
Changes of unrecognized tax losses, tax credit and temporary differences for prior periods			71,999			(86,845	)		44,573
Changes in deferred tax on tax losses carryforwards			2,374,237			—			—
Tax credit carryforwards			47,000			(8,588	)		15,270

			2,542,114			414,329			1,342,855

Income tax expense	￦		5,239,413			3,365,141			2,172,824

(2)

Reconciliation between actual income tax expense and amount computed by applying the statutory tax rate to income before income taxes for the years ended December 31, 2015, 2016 and 2017 are as follows:


		2015			2016			2017
		In millions of won
Income before income tax	￦		18,655,786			10,513,468			3,614,218

Income tax expense computed at applicable tax rate of 24.2%			4,514,700			2,544,259			874,641
Adjustments
Effect of applying gradual tax rate			(4,147	)		(5,082	)		(5,082	)
Effect of non-taxable income			(8,047	)		(29,554	)		(32,032	)
Effect of non-deductible expenses			17,734			22,258			15,032
Effects of tax credits and deduction			(103,435	)		(194,731	)		(161,069	)
Recognition (reversal) of unrecognized deferred tax asset, net			71,999			(86,845	)		44,573
Effect of change in deferred tax due to change in tax rate (from 24.2% to 27.5%)			—			—			1,055,154
Deferred income tax related to investments in subsidiaries and associates			784,793			862,956			394,145
Others, net			(10,936	)		20,767			(17,022	)

			747,961			589,769			1,293,699
Adjustment in respect of prior years due to change in estimate			(23,248	)		231,113			4,484

Income tax expense	￦		5,239,413			3,365,141			2,172,824

Effective tax rate			28	%		32	%		60	%

(3)

Income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive income (loss)) for the years ended December 31, 2015, 2016 and 2017 are as follows:


		2015			2016			2017
		In millions of won
Dividends of hybrid bond	￦		5,253			5,253			5,248
Gain on disposal of investments in subsidiaries			(14,144	)		(7,006	)		—
Effect of change in effective tax rate			—			—			(25	)

	￦		(8,891)			(1,753	)		5,223

(4)

Income tax recognized as other comprehensive income (loss) for the years ended December 31, 2015, 2016 and 2017 are as follows:


		2015			2016			2017
		In millions of won
Income tax recognized as other comprehensive income (loss)
Loss on valuation of available-for-sale financial assets	￦		(6,315	)		(8,143	)		(2,551	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			7,253			(18,335	)		(11,016	)
Remeasurement of defined benefit obligations			42,913			49,986			(80,645	)
Investments in associates			13,648			7,731			8,649
Others			(10,840	)		573			24,242

	￦		46,659			31,812			(61,321	)

(5)

Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the years ended December 31, 2016 and 2017 are as follows:


		2016
		Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity			Ending balance
		In millions of won
Deferred income tax on temporary differences
Employee benefits	￦		407,342			36,003			49,986			—			493,331
Cash flow hedge			(29,013	)		(6,235	)		(18,335	)		—			(53,583	)
Investments in associates or subsidiaries			(6,449,998	)		(717,072	)		7,731			(7,006	)		(7,166,345	)
Property, plant and equipment			(5,495,786	)		(31,532	)		—			—			(5,527,318	)
Finance lease			(272,430	)		(73,001	)		—			—			(345,431	)
Intangible assets			9,420			(433	)		—			—			8,987
Financial assets at fair value through profit or loss			(4	)		(58	)		—			—			(62	)
Available-for-sale financial assets			(49,199	)		(11,005	)		(8,143	)		—			(68,347	)
Deferred revenue			215,361			(1,502	)		—			—			213,859
Provisions			3,372,423			210,948			—			—			3,583,371
Doubtful receivables			1,405			1,291			—			—			2,696
Other finance liabilities			26,298			(1,302	)		—			5,253			30,249
Gains or losses on foreign exchange translation			128,714			10,224			—			—			138,938
Allowance for doubtful accounts			18,976			(1,724	)		—			—			17,252
Accrued income			(11,231	)		5,864			—			—			(5,367	)
Special deduction for property, plant and equipment			(194,347	)		38			—			—			(194,309	)
Reserve for research and human development			(20,688	)		7,805			—			—			(12,883	)
Others			576,585			118,712			573			—			695,870

			(7,766,172	)		(452,979	)		31,812			(1,753	)		(8,189,092	)

Deferred income tax on unused tax losses and tax credit
Tax losses			(3	)		3			—			—			—
Tax credit			27,115			8,588			—			—			35,703

			27,112			8,591			—			—			35,703

	￦		(7,739,060	)		(444,388	)		31,812			(1,753	)		(8,153,389	)


		2017
		Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity			Ending balance
		In millions of won
Deferred income tax on temporary differences
Employee benefits	￦		493,331			86,008			(80,645	)		—			498,694
Cash flow hedge			(53,583	)		130,044			(11,016	)		—			65,445
Investments in associates or subsidiaries			(7,166,345	)		(1,510,295	)		8,649			(25	)		(8,668,016	)
Property, plant and equipment			(5,527,318	)		(1,333,122	)		—			—			(6,860,440	)
Finance lease			(345,431	)		(81,518	)		—			—			(426,949	)
Intangible assets			8,987			(1,339	)		—			—			7,648
Financial assets at fair value through profit or loss			(62	)		952			—			—			890
Available-for-sale financial assets			(68,347	)		62,055			(2,551	)		—			(8,843	)
Deferred revenue			213,859			16,852			—			—			230,711
Provisions			3,583,371			1,239,462			—			—			4,822,833
Doubtful receivables			2,696			(2,637	)		—			—			59
Other finance liabilities			30,249			(2,742	)		—			5,248			32,755
Gains or losses on foreign exchange translation			138,938			(140,292	)		—			—			(1,354	)
Allowance for doubtful accounts			17,252			25,679			—			—			42,931
Accrued income			(5,367	)		3,542			—			—			(1,825	)
Special deduction for property, plant and equipment			(194,309	)		(6,618	)		—			—			(200,927	)
Reserve for research and human development			(12,883	)		9,842			—			—			(3,041	)
Others			695,870			232,642			24,242			—			952,754

			(8,189,092	)		(1,271,485	)		(61,321	)		5,223			(9,516,675	)

Deferred income tax on unused tax losses and tax credit
Tax losses			—			—			—			—			—
Tax credit			35,703			(15,272	)		—			—			20,431

			35,703			(15,272	)		—			—			20,431

	￦		(8,153,389	)		(1,286,757	)		(61,321	)		5,223			(9,496,244	)

(6)

Deferred income tax assets (liabilities) recognized in the statements of financial position as of December 31, 2016 and 2017 are as follows:


		2016			2017
		In millions of won
Deferred income tax assets	￦		795,131			919,153
Deferred income tax liabilities			(8,948,520	)		(10,415,397	)

	￦		(8,153,389	)		(9,496,244	)

(7)

Details of deductible temporary differences, tax losses and unused tax credits for which no deferred income tax assets were recognized as of December 31, 2016 and 2017 are as follows:

2016

2017

In millions of won

Deductible temporary differences

￦

426,718

444,426