Hérisvane had recognised no asset on 500,000 of deductible differences and 300,000 of losses carried forward. At the reporting date, winning a multi-year contract makes probable taxable profit of 650,000 (excluding reversal deductions) within the relevant periods (case assumption). Tax rate: 25%. Compute the asset to be recognised and the amount still with no asset.
- Unrecognised deductible differences
- 500,000
- Unrecognised losses carried forward
- 300,000
- Taxable profit now probable
- 650,000
- Tax rate (%)
- 25 %