Sbr (int/UK) Strategic Business Reporting

(a) 

FRS 102 and deferred tax

 

FRS 102 says that unrelieved tax losses and other deferred tax assets shall be 

recognised only to the extent that it is probable that they will be recovered against 

the reversal of deferred tax liabilities or other future taxable profits. 

(1 mark) 

According to FRS 102, the existence of losses is strong evidence that future taxable 

profit may not be available.  

(1 mark) 

Rooble has a history of recent losses, resulting in negative equity. It is therefore not 

probable that the losses will be utilised. 

(1 mark) 

Tax law seems to restrict the use of trading losses against trading profits. This 

reduces the likelihood that the losses will be utilised. 

(1 mark)  

---