CERTYNEX IFRS ACADEMY

For its consolidated financial statements, the Aubrelin group computes the temporary differences on a warehouse of its foreign subsidiary, which is taxed separately (no consolidated return: case data). It uses as tax base the one the warehouse would have under the law of the parent's country. What is the error?

The carrying amount of the warehouse in the subsidiary's separate accounts should have been used.

There is no error: on consolidation, the parent's law applies to the whole group.

Temporary differences of foreign subsidiaries are not computed in consolidated financial statements.

The tax base must be determined by reference to the subsidiary's tax return, as it is taxed separately.