INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

The sources of deferred income tax balances are as follows:


	As of December 31,
US$ MILLIONS	2020		2019
Deferred income tax assets
Financial instruments and other	$	18	$	15
Tax losses carried forward	34		31
	$	52	$	46
Deferred income tax liabilities
Property, plant and equipment	$	(643)	$	(505)
Intangible assets	(809)		(965)
	$	(1,452)	$	(1,470)
Net deferred income tax liabilities	$	(1,400)	$	(1,424)
Reflected in the statement of financial position as follows:
Deferred tax assets	$	43	$	41
Deferred tax liabilities	(1,443)		(1,465)
Net deferred tax liabilities	$	(1,400)	$	(1,424)

The sources of deferred income tax balances and movements are as follows:


			Recognized in
US$ MILLIONS	Jan. 1, 2020		Net Income		Other Comprehensive Income		Other(1)		Acquisitions (Dispositions)		Dec. 31, 2020
Deferred tax assets related to non-capital losses and capital losses	$	31	$	2	$	—	$	1	$	—	$	34
Deferred tax liabilities related to differences in tax and book basis, net	(1,455)		(104)		(68)		193		—		(1,434)
Net deferred tax liabilities	$	(1,424)	$	(102)	$	(68)	$	194	$	—	$	(1,400)


			Recognized in
US$ MILLIONS	Jan. 1, 2019		Net Income		Other Comprehensive Income		Other(1)		Acquisitions (Dispositions)		Dec. 31, 2019
Deferred tax assets related to non-capital losses and capital losses	$	31	$	—	$	—	$	—	$	—	$	31
Deferred tax liabilities related to differences in tax and book basis, net	(1,317)		(97)		(60)		19		—		(1,455)
Net deferred tax liabilities	$	(1,286)	$	(97)	$	(60)	$	19	$	—	$	(1,424)

(1)Other items relate to foreign exchange as deferred income taxes are calculated based on the functional currency of each operating entity.


	For the year ended December 31,
US$ MILLIONS	2020		2019		2018
Deferred tax arising on income and expenses recognized in other comprehensive income
Revaluation of property, plant and equipment	$	67	$	59	$	35
Cash flow hedges	1		1		1
Total income tax recognized directly in other comprehensive income	$	68	$	60	$	36

The major components of income tax expense include the following:


	For the year ended December 31,
US$ MILLIONS	2020		2019		2018
Tax expense comprises:
Current income tax expense	$	167	$	175	$	134
Deferred income tax expense
Origination and reversal of temporary differences	67		89		94
Change in tax rates or the imposition of new taxes	27		—		—
Deferred tax assets not recognized	8		8		6
Total income tax expense	$	269	$	272	$	234
Income tax on income before tax and non-controlling interests reconciles to tax expense as follows:
Net income before income tax and non-controlling interests	$	37	$	842	$	815
Income tax expense calculated at the domestic rates applicable to profits in the country concerned	70		267		257
Change in tax rates and new legislation	27		—		—
International operations subject to different tax rates	(3)		(3)		(12)
Taxable income attributable to non-controlling interests	(5)		(6)		(24)
Portion of gains subject to different tax rates	—		8		9
Deferred tax assets not recognized	8		8		6
Foreign exchange	17		—		—
Non-deductible dividends on exchangeable shares	18		—		—
Non-deductible remeasurement adjustments on exchangeable and class B shares	136		—		—
Permanent differences and other	1		(2)		(2)
Income tax expense recognized in profit or loss	$	269	$	272	$	234