CERTYNEX IFRS ACADEMY

Ilvaren, taxed in France, supports a deferred tax asset of 75,000 with the taxable differences of 300,000 of its subsidiary taxed in Italy, which will reverse in the same periods. Ilvaren has no other source of taxable profit. Where is the error?

The amount should have been computed at the Italian rate.

Differences of another authority and another taxable entity cannot support the asset.

There is no error: the consolidated group is a single entity, whose taxable differences offset freely.

The asset should have been offset against the subsidiary's liability.