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.