CERTYNEX IFRS ACADEMY

The Estriva group holds a foreign subsidiary whose deferred tax liability, translated under IAS 21, gives rise to an exchange loss of 12,000 recognised in profit or loss. How may Estriva classify this loss?

Mandatorily as deferred tax expense, without assessing usefulness.

Mandatorily in other comprehensive income.

As deferred tax expense if that presentation is considered the most useful to users.

As a direct reduction of the liability, with no effect on profit or loss.