CERTYNEX IFRS ACADEMY

Istrane holds 35% of Jonquelle, an associate. No agreement provides that Jonquelle' profits will not be distributed; distribution decisions rest with the majority shareholder (facts of the case). Istrane' accountant recognises no deferred tax on the taxable difference of 300,000, 'Istrane having no intention to sell'. What do you conclude?

The position is wrong: without control over timing, a deferred tax liability is recognised.

It is enough to disclose the difference in the notes.

A deferred tax asset is needed, Istrane being a minority holder.

The position is correct: with no intention to sell the shares, no reversal of the difference is foreseeable.