CERTYNEX IFRS ACADEMY

Ferrantis capitalises development costs, which are then amortised through profit or loss; tax law (case data) deducted them in full in the year they were incurred. What is the consequence under IAS 12?

No temporary difference, since the expense will eventually go through profit or loss as for tax.

A deductible temporary difference giving rise to a deferred tax asset.

A taxable temporary difference giving rise to a deferred tax liability.

A permanent difference, with no deferred tax, since the tax deduction has already been obtained.