Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 549

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 549
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 supporting deferred tax assets are described in Note7. | –The recognition of deferred tax assets is sensitive to estimates of futurecash flows projected for periods for which detailed forecasts are availableand to assumptions regarding the long-term pattern of cash flowsthereafter, on which forecasts of future taxable profit are based, andwhich affect the expected recovery periods and the pattern of utilisationof tax losses and tax credits. See Note7for further detail. |

The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of deferred tax assets in the next financial year, but does consider this to be an area that is inherently judgemental. (m) Provisions, contingent liabilities and guarantees Provisions Provisions are recognised when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made.

| HSBC Holdings plcAnnual Report on Form 20-F | 387 |

Critical estimates and judgements

| The recognition and measurement of provisions requires the Group to make a number of judgements, assumptions and estimates. The most significant are set outbelow:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Judgements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| –Determining whether a present obligation exists. Professional advice is taken onthe assessment of litigation and similar obligations.–Provisions for legal proceedings and regulatory matters typically require a higherdegree of judgement than other types of provisions. When matters are at anearly stage, accounting judgements can be difficult because of the high degree ofuncertainty associated with determining whether a present obligation exists, andestimating the probability and amount of any outflows that may arise. As mattersprogress, management and legal advisers evaluate on an ongoing basis whetherprovisions should be recognised, revising previous estimates as appropriate. Atmore advanced stages, it is typically easier to make estimates around a betterdefined set of possible outcomes. | –Provisions for legal proceedings and regulatory matters remain verysensitive to the assumptions used in the estimate. There could be a widerrange of possible outcomes for any pending legal proceedings,investigations or inquiries. As a result it is often not practicable to quantifya range of possible outcomes for individual matters. It is also notpracticable to meaningfully quantify ranges of potential outcomes inaggregate for these types of provisions because of the diverse nature andcircumstances of such matters and the wide range of