CERTYNEX IFRS ACADEMY

Sermaise incurred a tax loss in 20X5 that can be carried back (law in the case), giving a right to a refund of 64,000, certain in principle and amount. It recognised nothing in 20X5 and recognised income of 64,000 in 20X6, when the refund was received. What is the error?

None: a tax refund is recognised only when received, for prudence.

The income should have been recognised in equity rather than in 20X6 profit or loss.

The benefit should have been recognised as a deferred tax asset in 20X5.

The current tax asset and the income should have been recognised in 20X5, the period of the loss.