CERTYNEX IFRS ACADEMY

The Falquenne group acquires Gernasse, whose future profits at last make probable the use of Falquenne's own tax losses carried forward (potential asset 700,000). The financial controller recorded: debit deferred tax asset 700,000, credit Gernasse goodwill 700,000. Where is the error?

No asset could be recognised: an acquirer's losses are never recoverable.

The amount: the asset should have been capped at Gernasse's goodwill.

The other side: Falquenne's own asset is recognised as deferred tax income, goodwill remaining unchanged.

The date: the asset could only be recognised when the measurement period expired.