Hello
Where a company is loss making over a period of about three years. Then it makes profits after that.
It then wants to make use of previous tax losses but these were not recognised on the balance sheet in previous years as it was not clear whether the company would be profitable and the tax authorities would allow it to offset the tax payable against past losses.
However, things have changed, it is now allowed to utilise those losses. We now need to recognise the tax losses on the balance sheet.
Which entries would I pass, for example to recognise the deferred tax asset for the first time?
Initial recognition of deferred tax assets
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aichajeral
- Posts: 3
- Joined: 25 Oct 2023, 07:48
Re: Initial recognition of deferred tax assets
Thank you
Very useful guidance. This has clarified that I would credit equity, during this first recognition.
Very useful guidance. This has clarified that I would credit equity, during this first recognition.
Re: Initial recognition of deferred tax assets
No, the credit goes to P/L in the period of the reassessment.