Page 44 - Finac1 Test 1 slides - 5. Income Taxes (IAS 12)

INCOME TAXES

Assessed/Unused tax loss - example

• The criteria for recognising deferred tax assets arising from

the carry forward of unused assessed tax losses are the

same as the criteria for recognising deferred tax assets

arising from deductible temporary differences.

• The existence of unused assessed tax losses is strong

evidence that future taxable profit may not be available.

• To the extent that it is not probable that the taxable profit

will be available against which the unused tax losses can be

utilised, the deferred tax asset is not recognised

• At each end of the reporting period, an entity reassesses

unrecognised deferred tax assets. The entity recognises a

previously unrecognised deferred tax asset to the extent

that it has become probable that future taxable profit will

allow the deferred tax asset to be recovered.

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