Page 225 - F2 Integrated Workbook STUDENT 2019

Deferred tax

Specific applications of deferred tax

3.1 Specific applications regarding deferred tax

(1) Unutilised Trading Losses

 Losses are not taxable in current periods.

 Unutilised losses can be used to obtain future tax relief in periods when profits
are made (losses offset the future profits and reduce tax bill).

 Create a DEFERRED TAX ASSET.

Deferred tax assets can only be recognised up to the extent that it is
probable that future taxable profits will be available to offset the
losses as per IAS 12 Income taxes.

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