Table of Contents Notes to Consolidated Financial Statements — (Continued) Becton, Dickinson and Company Upon the Company's acquisition of CareFusion in 2015, the Company became a party to a tax matters agreement with Cardinal Health resulting from Cardinal Health's spin-off of CareFusion in fiscal year 2010. Under the tax matters agreement, the Company is obligated to indemnify Cardinal Health for certain tax exposures and transaction taxes prior to CareFusion’s spin-off from Cardinal Health. The indemnification payable is approximately $164 million at September 30, 2020 and is included in  Deferred Income Taxes and Other Liabilities  on the consolidated balance sheet. At September 30, 2020, 2019 and 2018, there are $719 million, $624 million and $632 million of unrecognized tax benefits that if recognized, would affect the effective tax rate. During the fiscal years ended September 30, 2020, 2019 and 2018, the Company reported interest and penalties associated with unrecognized tax benefits of $1 million, $26 million and $20 million on the consolidated statements of income as a component of Income tax provision (benefit) . The Company conducts business and files tax returns in numerous countries and currently has tax audits in progress in a number of tax jurisdictions. The IRS has completed its audit for fiscal year 2014 for the BD business prior to its acquisition of CareFusion. The IRS has also completed its audit for fiscal years 2015 and 2017 for the combined BD and CareFusion business. The IRS is currently examining the CareFusion legacy fiscal year 2014 and short period 2015, as well as BD's combined company for fiscal years 2016, 2018, and 2019. With regard to Bard, all examinations have been completed through calendar year 2014, and calendar years 2015, 2016, and 2017 are currently under examination by the IRS. For the other major tax jurisdictions where the Company conducts business, tax years are generally open after 2012. Deferred income taxes at September 30 consisted of: Deferred tax assets and liabilities are netted on the balance sheet by separate tax jurisdictions. Deferred taxes have not been provided on undistributed earnings of foreign subsidiaries as of September 30, 2020 since the determination of the total amount of unrecognized deferred tax liability is not practicable. (a) Net deferred tax assets are included in  Other Assets  and net deferred tax liabilities are included in  Deferred Income Taxes and Other Liabilities  on the consolidated balance sheets . Deferred Income Taxes (Millions of dollars) 2020 2019 2018 Balance at October 1 $ 577  $ 601  $ 407  Increase due to acquisitions 1  3  140  Increase due to current year tax positions 35  11  43  Increase due to prior year tax positions 76  6  43  Decreases due to prior year tax positions (49) (39) —  Decrease due to settlements with tax authorities (4) —  (29) Decrease due to lapse of statute of limitations (16) (5) (3) Balance at September 30 $ 620  $ 577  $ 601  2020 2019 (Millions of dollars) Assets Liabilities Assets Liabilities Compensation and benefits $ 554  $ —  $ 513  $ —  Property and equipment —  361  —  312  Intangibles —  2,408  —  2,624  Loss and credit carryforwards 1,900  —  1,327  —  Product recall and liability reserves 241  —  182  —  Other 501  137  396  74  3,196  2,906  2,417  3,011  Valuation allowance (1,820) —  (1,240) —  Net (a) $ 1,376  $ 2,906  $ 1,177  $ 3,011  96