Page 47 - Finac2 Test 1 Slides - 3. Intra-Group Transactions

CONSOLIDATIONS AFTER THE DATE OF ACQUISITION

Calculations

• COMMENT

• Deferred tax is not recognised on the indemnification

asset since the carrying amount and tax base of the
indemnification asset is equal (the economic benefits

from the indemnification asset will not be taxable in the

future) (IAS 12.7).

• Deferred tax is not recognised on the recognised
contingent liability (indemnification item) since the

carrying amount and tax base of the liability is equal.

• The tax base of the contingent liability is its carrying

amount minus amounts that will be tax deductible in the

future. In this case no amounts will be deductible in the

future in respect of this liability, therefore the carrying
amount and tax base is equal (IAS 12.8).

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