CERTYNEX IFRS ACADEMY

The Mercadine group acquires Norvaline on 1 April 20X5; goodwill amounts to 4,000,000. In October 20X5, still within the measurement period, a review of Norvaline's past tax returns reveals tax losses carried forward that existed at the acquisition date; the corresponding deferred tax benefit, judged recoverable, is 600,000. Which treatment applies?

Deferred tax income of 600,000 in profit or loss, goodwill being frozen at the acquisition date.

No recognition: a benefit not recognised at the acquisition can only be recognised after the measurement period.

A deferred tax asset of 600,000 against a reduction of goodwill, which falls to 3,400,000.

A deferred tax asset of 600,000 against group equity.