Page 42 - PowerPoint Presentation

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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