Company: IMO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000049938-25-000015
Chunk: 112

Company: IMPERIAL OIL LTD
Filing Date: 2025-02-19
Form: 10-K
Item: Item 16
Chunk 112
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23.2 22.6 (a)Includes federal tax rate of 15 percent and combined provincial tax rate of 9.1 percent.(b)Other primarily relates to prior year adjustments, disposals, investment tax credits and re-assessments. In 2022, the company's sale of its interests in XTO Energy Canada decreased the effective income tax rate by 1.3 percent.Deferred income taxes are based on differences between the accounting and tax values of assets and liabilities. These differences in value are re-measured at each year-end using the tax rates and tax laws expected to apply when those differences are realized or settled in the future. Components of deferred income tax liabilities and assets as at December 31 were:millions of Canadian dollars2024 2023 2022 Depreciation and amortization5,267 5,366 5,388 Successful drilling and land acquisitions236 237 236 Pension and benefits(15)(168)(105)Asset retirement obligation(686)(655)(529)Capitalized interest185 155 127 LIFO inventory valuation(468)(406)(454)Tax loss carryforwards(66)(69)(84)Valuation allowance66 69 73 Other(35)(60)(53)Net deferred income tax liabilities4,484 4,469 4,599 

88

Unrecognized tax benefits Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements. The following table summarizes the movement in unrecognized tax benefits: millions of Canadian dollars2024 2023 2022 Balance as of January 147 60 47 Additions based on current year’s tax position2 7 12 Additions for prior years’ tax positions— — 10 Settlements with tax authorities(15)(20)(9)Balance as of December 3134 47 60 The unrecognized tax benefit balances shown above predominantly relate to tax positions that would reduce the company’s effective tax rate if the positions are favourably resolved. Unfavourable resolution of these tax positions generally would not increase the effective tax rate. The 2024, 2023 and 2022 changes in unrecognized tax benefits did not have a material effect on the company’s net income or cash flow. The company’s tax filings from 2018 to 2024 are subject to examination by the tax authorities. Tax filings from 2009 to