Recognition of an impairment loss creates a deferred tax asset
An entity has an asset with a carrying amount of €2,000 whose recoverable amount is €1300. The tax rate is 30% and the tax base of the asset is €1,500. Impairment losses are not deductible for tax purposes. The effect of the impairment loss is as follows:
|
Before impairment |
Effect of mpairment € |
After impairment |
|
|
Carrying amount |
2,000 |
(700) |
1,300 |
|
lax base |
1,500 |
1,500 |
|
|
Taxable (deductible) temporary difference |
500 |
(700) |
(200) |
|
Deferred tax liability (asset) at 30% |
150 |
(210) |
(60) |
The entity will recognise the deferred tax asset to the extent that the respective recognition criteria of IAS 12 are met.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
