Deferred tax in business combinations
Posted: 01 Feb 2024, 22:49
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
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