CERTYNEX IFRS ACADEMY

Dravona separately acquires an operating licence for 650,000. The tax law (data) will never allow 150,000 of this cost to be deducted; the acquisition affects neither accounting profit nor taxable profit, and no deductible difference arises. Tax rate: 25%. Which treatment applies at acquisition?

Deferred tax liability of 37,500 as an expense for the year.

Deferred tax liability of 37,500 added to the cost of the licence, as the transaction does not affect profit for the year.

No deferred tax on the difference of 150,000: the initial recognition exception applies.

Deferred tax asset of 37,500.