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- November 21, 2019 at 4:21 pm
Apologies if this has been confirmed previously, but is my understanding correct:
If given no specific instruction, taxable losses can be recognized as yielding positive tax cash-inflows – logic being that they offset taxable profits elsewhere in the company (and we should state assumption to this effect) eg Fubuki Dec 2010
If told specifically above i.e.to recognise as offsetting losses elsewhere in the company, then naturally do this (and no need hence to state assumption)
If told specifically that they can or are to be carried-forward and used against future profitable years in the same project/investment (eg Tippletine Mar/June2018) we instead follow this instruction and do as is done in Tippletine.
And there are no other likely tax scenarios to trip us up? (Other than timing eg in same year/1 year in arrears etc)November 22, 2019 at 8:05 am
What you have written is correct.
The most likely situation in the exam where losses have to be carried forward is when it is a new investment in a foreign country (and therefore tax is paid in the foreign country and losses cannot be offset against the profits in the home country).
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