CERTYNEX IFRS ACADEMY

Falquenne deducted in 20X5 interest paid to a sister company; according to its advisers, it is not probable that a fully informed authority will accept this deduction (case data). How is the uncertainty reflected in the 20X5 financial statements?

A provision for tax risks under IAS 37, separate from current tax.

A mere mention in the note, the return having already been filed.

An increase in current tax, taxable profit reflecting the effect of the uncertainty.

A reduction in accounting profit before tax by the amount of the interest.