Hi all
I am confused in the treatment of Deferred tax arising in business combination
When adjusting net assets of subsidiary to fair value, a temporary dif. arises if the tx base is cero
So goodwill will increase to recognise the DTL
Hence, is this deferred tax liability recognised or not? Reading here and the standard, it says that it should not because initial recognition exemption applies but i have seen examples that recognise this temp. Dif
Thanks
Deferred tax in business combinations
Re: Deferred tax in business combinations
You're mixing up deferred tax recognised on fair value adjustments with deferred tax arising on goodwill.
Re: Deferred tax in business combinations
Hi Marek
Thanks - can you explain the difference please? Or give me
More details?
Thanks
Thanks - can you explain the difference please? Or give me
More details?
Thanks
Re: Deferred tax in business combinations
Refer to the example in this section:
https://ifrscommunity.com/knowledge-bas ... g-goodwill
https://ifrscommunity.com/knowledge-bas ... g-goodwill
Re: Deferred tax in business combinations
Apologies I couldn’t find deferred tax arising in goodwill
Would you copy and paste here please?
Thanks
Would you copy and paste here please?
Thanks
Re: Deferred tax in business combinations
That's because deferred tax isn't recognised on goodwill
https://ifrscommunity.com/knowledge-bas ... d-goodwill
https://ifrscommunity.com/knowledge-bas ... d-goodwill
Re: Deferred tax in business combinations
Thanks Marek
So to make it clear - deferred tax is not recognised for goodwill
But
We recognise deferred tax for the fair value of the net assets of the sub. When calculating goodwill, Which in turns increases goodwill (in case carrying amounts were higher than tax base)
Is that the case?
So to make it clear - deferred tax is not recognised for goodwill
But
We recognise deferred tax for the fair value of the net assets of the sub. When calculating goodwill, Which in turns increases goodwill (in case carrying amounts were higher than tax base)
Is that the case?