Its budgets suggested this was likely, but the enforcer (as ESMA likes to put it) looked at its budgeted results for the past two years, and concluded the issuer “was not capable of making accurate forecasts in the past.” And then, the issuer had disclosed a material uncertainty about its ability to continue as a going concern. The issuer had recognized material losses for the last four years, and would have had to generate a quite dramatic turnaround during the seven year period. The explanation for this decision cites various problems. Tax assets and going concern uncertainties
Disclosure of deferred tax asset full#
The enforcer disagreed with the full recognition of deferred tax asset arising from the carry forward of unused tax losses and considered it to be recognizable only to the extent of its taxable temporary differences.”.It expected a substantial reduction in impairments of loans, compared to the historical losses with a substantial effect on the future taxable profit, and low rates of impairment of loans compared to the impairment losses of other banks. This view was based on the budgets for the years 2012-2018.The issuer disclosed that it expected that future taxable profits before tax would be available, within a period of seven years, against which the unused tax losses could be utilised. According to the local tax regulation there is no time limit regarding the period to which the unused tax losses can be used.
In the consolidated IFRS financial statements for 2011, the issuer recognised a net deferred tax asset of CU 21.6 million (representing 18.6% of its total equity), where CU 4.1 million represented taxable temporary differences and CU 25.7 million represented the carry-forward of unused tax losses. Here’s another of the issues from some extracts of enforcement decisions recently issued by the European Securities and Markets Authority (ESMA) (for more background see here): A European example of the difficulty of recognizing a deferred tax asset for unused tax losses
0 kommentar(er)
