CERTYNEX IFRS ACADEMY

Settling a liability in the statement of financial position will probably make the entity's future tax payments smaller than if it had no tax consequences. What does the core principle of IAS 12 require?

No entry: the tax saving will be recognised only when the tax return is filed.

A reduction in the carrying amount of the liability by the expected tax saving.

Current tax income recognised now for the amount of the expected saving.

A deferred tax asset, with limited exceptions.