CERTYNEX IFRS ACADEMY

Estriva deducted a clean-up provision in 20X5. Two independent tax opinions and settled case law conclude that the deduction will be accepted by a fully informed authority (case data). Which treatment applies in the 20X5 financial statements?

Recognise the tax related to the deduction out of prudence, as long as no audit has taken place.

Follow the treatment in the tax return: no additional tax is recognised.

Recognise half of the tax at stake, as case law may change.

Defer any analysis until the limitation period expires.