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Hi there,
Deferred tax assets are recognized only to the extent that it’s probable that future taxable profits will be available against which the temporary differences, unused tax losses and credits can be utilized. Does it mean that the amount of deferred tax assets should not exceed the probable future taxable profits even though the deferred tax assets are expected to be more than them?
I think you have the right idea if I have understood you correctly.Basically,for example,if profits are only expected in the next year then only assets equal to amount saved by setting existing losses against then can be recognised.If further losses exist but are not expected to be usable then these are not recognised as tax assets.
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