Dec 2015 Q2c Chemclean (IAS 12)

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March 27, 2018 at 10:17 am #443878
sss111
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Referring to answers, how does
1) making inaccurate forecasts in the past and

2)presenting future budgets based on general assumptions rather than on expected ones

enable the use of the deferred tax asset ?

Thank you in advance!
March 29, 2018 at 11:35 am #444100
P2-D2
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Hi,

We can only recognise the deferred tax asset if we believe that we will return to profitability in the future. Any inaccurate forecasting or general assumptions that suggest the company will be profitable in the future will therefore mean that we are incorrectly recognising a deferred tax asset.

Thanks
May 12, 2018 at 9:59 am #451457
rimshy
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For the same question its given chemclean recognised a net deferred tax asset of $16m which represented 18% of its total equity . The asset was made up of 3m taxable temporary differences and 19m relating to the carry forward of unused tax losses. Tax rate is 30%

Answer says. In order to use the deferred tax asset of 16m chemclean would have to recognize a profit of $53.3m at the existing rate of 30%. From where does 53.3 comes ? Not able to understand please explain
May 16, 2018 at 9:09 pm #452336
P2-D2
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Hi,

The $16m is the post tax figure which represents 30% of the before tax figure. To get the before tax figure you divided the $16m by 0.3.

Thanks
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