[pc-pvt-content allow=”21,22,23,36,32,33″]
I. OBJECTIVE
1. To provide guidelines on the accounting policy for deferred tax assets
II. DEFINITION OF TERMS
1. Deferred Tax Asset – refers to the amount of income taxes that can be recovered in the future
III. GENERAL POLICIES
A deferred tax asset should be recognized for deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized.
Deferred tax assets should be measured at the tax rates that are expected to apply to the period when the asset is realized, based on tax rates/laws that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets should not be discounted.
Current tax assets and current tax liabilities should be offset on the balance sheet only if the entity has the legal right and the intention to settle on a net basis. Deferred tax assets and deferred tax liabilities should be offset on the balance sheet only if the entity has the legal right to settle on a net basis and they are levied by the same taxing authority on the same entity or different entities that intend to realize the asset and settle the liability at the same time.
IV. PROCEDURE FLOWCHART
Flowchart Title
(Not Applicable)
V. REFERENCE/INTERFACE PROCESS
Document Title
1. Summary of Accounting Policies
VI. FORMS AND RECORDS
Form Title
(Not Applicable)
[/pc-pvt-content]
