CERTYNEX IFRS ACADEMY

Kervadin recognises an expense each year for its share option plan; the tax law in the case grants the deduction only when the options are exercised, for their intrinsic value at that date. Why does deferred tax arise at the reporting date?

Because the remuneration expense is always non-deductible.

Because the taxation authority requires deferred tax to be recognised at the date the options are granted to managers.

Because the deduction arises later than the expense and for an amount to be estimated at the reporting date.

Because equity must always be reduced by the tax relating to options.