A general meeting of Deutsche Bank
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German Bank incorrectly disclosed deferred tax assets in its 2019 annual accounts that did not comply with international accounting standards, German regulator BaFin said on Tuesday.
“The statements regarding deferred tax assets in the consolidated financial statements were not complete,” the regulator, formally known as the Federal Financial Supervisory Authority, said in a rack translated by CNBC.
It said 2.076 billion euros ($2.26 billion) of deferred tax assets had not been separately disclosed in the notes to Deutsche Bank’s U.S. operations. The bank should have made this public because it had made losses for several years, the bank said.
Moreover, the bank should have explained why it was confident that it would make sufficient profits in the future, which it did not do, BaFin said.
The disclosure error was contrary to International Accounting Standards rules, BaFin said in a second statement.
The findings are the result of a random sample survey initially launched by Germany’s now-defunct Financial Reporting Enforcement Panel, the regulator noted.
In a statement to CNBC, Deutsche Bank said its financial statements continue to meet international reporting standards.
“There is no suggestion on BaFin’s part that there is any inaccuracy in Deutsche Bank’s 2019 accounts, and no restatement or other action is required. Today, as at the time of publication, Deutsche Bank believes that its 2019 financial statements and other disclosures are fully compliant with IFRS [International Financial Reporting Standards] requirements,” a bank spokesperson said in an emailed comment.
Deferred tax assets are figures in a company’s financial statements that effectively reduce taxable income in the future, for example in connection with a previous overpayment or prepayment of taxes.
Its disclosure is important for transparency about expected future tax implications, BaFin noted.
Deutsche Bank’s European-traded shares were last down 0.9% on Tuesday morning.