CERTYNEX IFRS ACADEMY

Norbrey has held tax-deductible goodwill of 500,000 since 20X2; its tax base, originally equal to its carrying amount, has fallen to 300,000 at 31 December 20X5 as a result of tax amortisation. The goodwill is neither amortised nor impaired in the accounts. The controller recognised no deferred tax, citing the goodwill exception. Where is the error?

A deferred tax liability should have been recognised on the taxable difference of 200,000.

There is no error: the goodwill exception covers all deferred tax relating to goodwill, at any date.

A deferred tax asset on 200,000 was needed.

A liability computed on 500,000 was needed.