CERTYNEX IFRS ACADEMY

Escoulan holds bonds at fair value, 80,000 below their tax base. Based on management's documented analysis (case data), no taxable profit is probable in the periods in which the loss could be deducted, nor from any other source. Which analysis should be adopted?

Recognise a deferred tax asset on the 80,000, since every deductible difference gives rise to an asset.

Recognise no difference: the loss is only unrealised.

Identify a deductible difference of 80,000, but recognise no deferred tax asset, as no taxable profit is probable.

Recognise a deferred tax liability on the 80,000, for prudence.