Page 15 - Finac1 Test 1 slides - 5. Income Taxes (IAS 12)

INCOME TAXES

Deferred Tax Asset

• A deferred tax asset

• should be recognised for all deductible temporary

differences to the extent that it is probable that taxable

profit will be available against which deductible temporary

difference can be utilised unless the deferred tax asset

arises from the following:

• EXEMPTION – IAS 12.24 The initial recognition of an

asset/liability in a transaction that:

• is not a business combination; and

• at the time of the transaction, affects neither
accounting profit nor taxable profit/loss

• Note:

• A deferred tax asset is recognised only when it is probable that

taxable profits will be available against which the deferred tax asset
can be utilised

15