Page 172 - Microsoft Word - 00 P1 IW Prelims.docx

Chapter 12

3.3 Unused tax losses

Where an entity has unused tax losses, IAS 12 allows a deferred tax asset to be
recognised only to the extent that it is probable that future taxable profits will be
available against which the unused tax losses can be utilised.

Factors to consider:

 Can the deductible difference be set off against taxable differences?

 Is it probable that taxable profits will arise before the tax losses expire?

 Did the tax losses arise from events unlikely to recur?

 Will tax planning opportunities be available?

Illustrations and further practice

Now try TYU question 6 from Chapter 12

166