CERTYNEX IFRS ACADEMY

Isparo, judging acceptance of a deduction unlikely, recognised 180,000 as a 'charge to provisions for risks' (operating expense) and as a 'provision for tax risks' in liabilities. Where is the error?

The amount: a provision must always be discounted.

The classification: this is current tax expense and a current tax liability, under IAS 12.

The principle: no uncertainty should be recognised before an actual tax audit.

The calculation: the provision should have been half of 180,000.