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Relative to deferred tax assets, such assets can only be recognized in the accounts to the extent that future taxable profit will be available to utilize those assets.
Question sir, we are preparing accounts for the year end and so, in deciding on whether or not to recognize these deferred tax assets, how can we gain assurance that taxable profits will be available in the future?
Hi,
You would need to look at budgets and how the company has performed since the end of the reporting date. Also, have there been any significant events since the reporting date that might indicate the company might struggle.
This is more of an audit issue and wouldn’t really be seen in SBR.
Thanks
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