Accounting for Income Tax (IAS 12)

The objective of this IAS 12 is to prescribe the accounting treatment for income taxes. The principal
issue in accounting for income taxes is how to account for the current and future tax consequences of:
• (a) the future recovery (settlement) of the carrying amount of assets (liabilities) that are
recognised in an entity’s statement of financial position; and
• (b) transactions and other events of the current period that are recognised in an entity’s financial
statements.

This Standard requires an entity to account for the tax consequences of transactions and other events in
the same way that it accounts for the transactions and other events themselves. Thus, for transactions
and other events recognised in profit or loss, any related tax effects are also recognised in profit or loss.
For transactions and other events recognised outside profit or loss (either in other comprehensive income
or directly in equity), any related tax effects are also recognised outside profit or loss (either in other
comprehensive income or directly in equity, respectively).

MAIN Issue: Accounting Profit/Loss items does not match taxability and deductibility rules in the Tax
Returns.

Some income items recognized in accounting profit/loss may be non-taxable (either tax exempt like
interest and dividend income, or exempt from taxation altogether). It is also possible that some items not
otherwise recognized as accounting income, because of the accrual accounting principle, may be taxed
on a cash basis.

Similarly, some expense items recognized in accounting profit or loss may be non-deductible (interest
expense, to some extent, or non-deductible at all). Meanwhile, some expenses not yet recognized, for
example, prepayments, are already deductible for tax purposes but not yet recognized as an expense
under accrual accounting.

MAIN Goal: Properly compute current income tax.

• Current (income) tax is the amount of income taxes payable (recoverable) in respect of the
taxable profit (tax loss) for a period.
• Taxable profit (tax loss) is the profit (loss) for a period, determined in accordance with the rules
established by the taxation authorities, upon which income taxes are payable (recoverable).
• Current income tax (benefit) = Taxable profit (tax loss) x Tax rate

Current income tax vs. Deferred income tax1

Current income tax Deferred income tax

Substance Payable to tax authority Accounting measure
Basis Taxable profit (loss) Temporary differences
Timing Current period Future periods
(payable currently) (taxable/deductible in future
periods)

1
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 • Temporary differences are differences between the carrying amount of an asset or liability in the
statement of financial position and its tax base. Temporary differences may be either:
o (a) taxable temporary differences, which are temporary differences that will result in
taxable amounts in determining taxable profit (tax loss) of future periods when the
carrying amount of the asset or liability is recovered or settled. – Deferred Tax Liability
o (b) deductible temporary differences, which are temporary differences that will result in
amounts that are deductible in determining taxable profit (tax loss) of future periods
when the carrying amount of the asset or liability is recovered or settled. – Deferred Tax
Asset
• Tax expense (tax income) is the aggregate amount included in the determination of profit or loss
for the period in respect of current tax and deferred tax.
o Total tax expense = Current tax expense + Deferred tax expense

IAS 12.7 Tax base (Asset)

The tax base of an asset is the amount that will be deductible for tax purposes against any taxable
economic benefits that will flow to an entity when it recovers the carrying amount of the asset. If those
economic benefits will not be taxable, the tax base of the asset is equal to its carrying amount.

Examples:
1. A machine cost 100. For tax purposes, depreciation of 30 has already been deducted in the current
and prior periods and the remaining cost will be deductible in future periods, either as
depreciation or through a deduction on disposal. Revenue generated by using the machine is
taxable, any gain on disposal of the machine will be taxable and any loss on disposal will be
deductible for tax purposes. The tax base of the machine is 70.
2. Interest receivable has a carrying amount of 100. The related interest revenue will be taxed on a
cash basis. The tax base of the interest receivable is nil.
3. Trade receivables have a carrying amount of 100. The related revenue has already been included
in taxable profit (tax loss). The tax base of the trade receivables is 100.
4. Dividends receivable from a subsidiary have a carrying amount of 100. The dividends are not
taxable. In substance, the entire carrying amount of the asset is deductible against the economic
benefits. Consequently, the tax base of the dividends receivable is 100.
5. A loan receivable has a carrying amount of 100. The repayment of the loan will have no tax
consequences. The tax base of the loan is 100.

IAS 12.8 Tax base (Liability)

The tax base of a liability is its carrying amount, less any amount that will be deductible for tax purposes
in respect of that liability in future periods. In the case of revenue which is received in advance, the tax
base of the resulting liability is its carrying amount, less any amount of the revenue that will not
be taxable in future periods.

Examples:
1. Current liabilities include accrued expenses with a carrying amount of 100. The related expense
will be deducted for tax purposes on a cash basis. The tax base of the accrued expenses is nil.
2. Current liabilities include interest revenue received in advance, with a carrying amount of 100.
The related interest revenue was taxed on a cash basis. The tax base of the interest received in
advance is nil.

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 3. Current liabilities include accrued expenses with a carrying amount of 100. The related expense
has already been deducted for tax purposes. The tax base of the accrued expenses is 100.
4. Current liabilities include accrued fines and penalties with a carrying amount of 100. Fines and
penalties are not deductible for tax purposes. The tax base of the accrued fines and penalties is
100.
5. A loan payable has a carrying amount of 100. The repayment of the loan will have no tax
consequences. The tax base of the loan is 100.

IAS 12.9 No related asset/liability

Some items have a tax base but are not recognised as assets and liabilities in the statement of financial
position. For example, research costs are recognized as an expense in determining accounting profit in
the period in which they are incurred but may not be permitted as a deduction in determining taxable
profit (tax loss) until a later period. The difference between the tax base of the research costs, being the
amount the taxation authorities will permit as a deduction in future periods, and the carrying amount of
nil is a deductible temporary difference that results in a deferred tax asset.

Recognition of Deferred Tax Asset (DTA) and Deferred Tax Liability (DTL)

IAS 12.16
When the carrying amount of the asset exceeds its tax base, the amount of taxable economic benefits will
exceed the amount that will be allowed as a deduction for tax purposes. This difference is a taxable
temporary difference and the obligation to pay the resulting income taxes in future periods is a deferred
tax liability.

As the entity recovers the carrying amount of the asset, the taxable temporary difference will reverse and
the entity will have taxable profit. This makes it probable that economic benefits will flow from the entity
in the form of tax payments.

Example:
An asset which cost 150 has a carrying amount of 100. Cumulative depreciation for tax purposes is 90 and
the tax rate is 25%. The tax base of the asset is 60 (cost of 150 less cumulative tax depreciation of 90).

To recover the carrying amount of 100, the entity must earn taxable income of 100, but will only be able
to deduct tax depreciation of 60. Consequently, the entity will pay income taxes of 10 (40 at 25%) when
it recovers the carrying amount of the asset. The difference between the carrying amount of 100 and the
tax base of 60 is a taxable temporary difference of 40. Therefore, the entity recognises a deferred tax
liability of 10 (40 at 25%) representing the income taxes that it will pay when it recovers the carrying
amount of the asset.

IAS 12.17
Some temporary differences arise when income or expense is included in accounting profit in one period
but is included in taxable profit in a different period. Such temporary differences are often described as
timing differences.

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The following are examples of temporary differences of this kind which are taxable temporary differences
and which therefore result in deferred tax liabilities:
• (a) interest revenue is included in accounting profit on a time proportion basis but may, in some
jurisdictions, be included in taxable profit when cash is collected. The tax base of any receivable
recognised in the statement of financial position with respect to such revenues is nil because the
revenues do not affect taxable profit until cash is collected;
• (b) depreciation used in determining taxable profit (tax loss) may differ from that used in
determining accounting profit. The temporary difference is the difference between the carrying
amount of the asset and its tax base which is the original cost of the asset less all deductions in
respect of that asset permitted by the taxation authorities in determining taxable profit of the
current and prior periods. A taxable temporary difference arises, and results in a deferred tax
liability, when tax depreciation is accelerated (if tax depreciation is less rapid than accounting
depreciation, a deductible temporary difference arises, and results in a deferred tax asset); and
• (c) development costs may be capitalised and amortised over future periods in determining
accounting profit but deducted in determining taxable profit in the period in which they are
incurred. Such development costs have a tax base of nil as they have already been deducted from
taxable profit. The temporary difference is the difference between the carrying amount of the
development costs and their tax base of nil.

IAS 12.18
Temporary differences also arise when:
• the identifiable assets acquired and liabilities assumed in a business combination are recognised
at their fair values in accordance with IFRS 3 Business Combinations, but no equivalent adjustment
is made for tax purposes;
• (b) assets are revalued and no equivalent adjustment is made for tax purposes;
• (c) goodwill arises in a business combination;
• (d) the tax base of an asset or liability on initial recognition differs from its initial carrying amount,
for example when an entity benefits from non‑taxable government grants related to assets; or
• (e) the carrying amount of investments in subsidiaries, branches and associates or interests in
joint arrangements becomes different from the tax base of the investment or interest.

IAS 12.46-49 Measurement of current and deferred tax items

Current tax liabilities (assets) for the current and prior periods shall be measured at the amount expected
to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting period.

When different tax rates apply to different levels of taxable income, deferred tax assets and liabilities are
measured using the average rates that are expected to apply to the taxable profit (tax loss) of the periods
in which the temporary differences are expected to reverse.

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The measurement of deferred tax liabilities and deferred tax assets shall reflect the tax consequences
that would follow from the manner in which the entity expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.

IAS 12.34-36 Unused tax credits

A deferred tax asset shall be recognised for the carryforward of unused tax losses and unused tax credits
to the extent that it is probable that future taxable profit will be available against which the unused tax
losses and unused tax credits can be utilised.

IAS 12.71 Offset

An entity shall offset current tax assets and current tax liabilities if, and only if, the entity:
• (a) has a legally enforceable right to set off the recognised amounts; and
• (b) intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.

An entity shall offset deferred tax assets and deferred tax liabilities if, and
only if:
• (a) the entity has a legally enforceable right to set off current tax assets against current tax
liabilities; and
• (b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the
same taxation authority on either:
o (i) the same taxable entity; or
o (ii) different taxable entities which intend either to settle current tax liabilities and assets
on a net basis, or to realise the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax liabilities or assets are expected
to be settled or recovered.

IAS 12.77 Tax expense

The tax expense (income) related to profit or loss from ordinary activities shall be presented as part of
profit or loss in the statement(s) of profit or loss and other comprehensive income.

IAS 12.61 Items recognized outside profit/loss

Current tax and deferred tax shall be recognised outside profit or loss if the tax relates to items that are
recognised, in the same or a different period, outside profit or loss. Therefore, current tax and deferred
tax that relates to items that are recognized, in the same or a different period:
• (a) in other comprehensive income, shall be recognised in other comprehensive income.
• (b) directly in equity, shall be recognised directly in equity.

Procedure:

1. Accounting income before tax

2. + Permanent differences
a. Income subject to final tax (Examples: Interest income, dividend income)
b. Non-deductible expense (Examples: Goodwill amortization, tax penalties, interest
expense*)
i. *Nondeductible interest expense =

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 Gross interest income x [(Tax rate – Final tax) / Tax rate)
3. = Financial income subject to tax (FIST)
4. + Temporary differences
a. Deferred tax assets
i. Bad debts (Allowance for doubtful accounts) – Reverses when write off > bad
debts expense.
ii. Depreciation, when book depreciation is accelerated vs tax – Reverses when tax
depreciation > book depreciation, or when sold.
iii. Deferred revenues, IF, revenues are taxable on a cash basis. Reverses when
deferred revenues decrease.
iv. Provisions accrued expenses, IF deductible on a cash basis. Reverses when actual
payments > provision/accruals for the year. If deductibility is accrual or cash
payment, whichever comes first, no temporary difference.
v. Expenses (e.g. research expense) which are not capitalized, but deductible for tax
purposes in the future.
vi. Unused tax credits. Reverses when it is probable that these will be used against
taxable income before the credits expire.
b. Deferred tax liabilities
i. Accrued revenues, IF, revenues are taxable on a cash basis. Reverses when
accrued revenues decrease. If taxability is accrual or cash receipt, whichever
comes first, no temporary difference.
ii. Prepayments, IF, deductible on a cash basis. Reverses when prepayments balance
decrease.
iii. Depreciation, when tax depreciation is accelerated vs book depreciation.
Reverses when book depreciation > tax depreciation, or when sold.
5. = Taxable income

Income tax expense – Current = Taxable income x tax rate

Income tax expense – Deferred = Temporary differences x tax rate
Total tax expense = Current + Deferred tax expense = FIST x tax rate

OTHER RELEVANT PROVISIONS

IAS 12.20 Assets carried at fair value

In some jurisdictions, the revaluation or other restatement of an asset to fair value affects taxable profit
(tax loss) for the current period. As a result, the tax base of the asset is adjusted and no temporary
difference arises. In other jurisdictions, the revaluation or restatement of an asset does not affect taxable
profit in the period of the revaluation or restatement and, consequently, the tax base of the asset is not
adjusted. Nevertheless, the future recovery of the carrying amount will result in a taxable flow of
economic benefits to the entity and the amount that will be deductible for tax purposes will differ from
the amount of those economic benefits. The difference between the carrying amount of a revalued asset
and its tax base is a temporary difference and gives rise to a deferred tax liability or asset. This is true even
if:

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 • (a) the entity does not intend to dispose of the asset. In such cases, the revalued carrying amount
of the asset will be recovered through use and this will generate taxable income which exceeds
the depreciation that will be allowable for tax purposes in future periods; or
• (b) tax on capital gains is deferred if the proceeds of the disposal of the asset are invested in
similar assets. In such cases, the tax will ultimately become payable on sale or use of the similar
assets.

IAS 12.22 Initial recognition of an asset or liability

A temporary difference may arise on initial recognition of an asset or liability, for example if part or all of
the cost of an asset will not be deductible for tax purposes. The method of accounting for such a
temporary difference depends on the nature of the transaction that led to the initial recognition of the
asset or liability:
• (a) in a business combination, an entity recognises any deferred tax liability or asset and this
affects the amount of goodwill or bargain purchase gain it recognises;
• (b) if the transaction affects either accounting profit or taxable profit, an entity recognises any
deferred tax liability or asset and recognises the resulting deferred tax expense or income in profit
or loss;
• (c) if the transaction is not a business combination, and affects neither accounting profit nor
taxable profit, an entity would, in the absence of the exemption provided by paragraphs 15 and
24, recognise the resulting deferred tax liability or asset and adjust the carrying amount of the
asset or liability by the same amount. Such adjustments would make the financial statements less
transparent. Therefore, this Standard does not permit an entity to recognise the resulting
deferred tax liability or asset, either on initial recognition or subsequently (see example below).
Furthermore, an entity does not recognise subsequent changes in the unrecognised deferred tax
liability or asset as the asset is depreciated.

Example:
An entity intends to use an asset which cost 1,000 throughout its useful life of five years and then dispose
of it for a residual value of nil. The tax rate is 40%. Depreciation of the asset is not deductible for tax
purposes. On disposal, any capital gain would not be taxable and any capital loss would not be deductible.

As it recovers the carrying amount of the asset, the entity will earn taxable income of 1,000 and pay tax
of 400. The entity does not recognise the resulting deferred tax liability of 400 because it results from the
initial recognition of the asset. In the following year, the carrying amount of the asset is 800. In earning
taxable income of 800, the entity will pay tax of 320. The entity does not recognise the deferred tax liability
of 320 because it results from the initial recognition of the asset.

IAS 12.24 Deductible temporary differences

A deferred tax asset shall be recognised for all deductible temporary differences to the extent that it is
probable that taxable profit will be available against which the deductible temporary difference can be
utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a
transaction that:
• is not a business combination; and
• at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

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 • However, for deductible temporary differences associated with investments in subsidiaries,
branches and associates, and interests in joint arrangements, a deferred tax asset shall be
recognised in accordance with paragraph 44.

It is inherent in the recognition of a liability that the carrying amount will be settled in future periods
through an outflow from the entity of resources embodying economic benefits. When resources flow from
the entity, part or all of their amounts may be deductible in determining taxable profit of a
period later than the period in which the liability is recognised. In such cases, a temporary difference exists
between the carrying amount of the liability and its tax base. Accordingly, a deferred tax asset arises in
respect of the income taxes that will be recoverable in the future periods when that part of the liability
is allowed as a deduction in determining taxable profit. Similarly, if the carrying amount of an asset is
less than its tax base, the difference gives rise to a deferred tax asset in respect of the income taxes that
will be recoverable in future periods.

Example:
An entity recognises a liability of 100 for accrued product warranty costs. For tax purposes, the product
warranty costs will not be deductible until the entity pays claims. The tax rate is 25%. The tax base of the
liability is nil (carrying amount of 100, less the amount that will be deductible for tax purposes in respect
of that liability in future periods). In settling the liability for its carrying amount, the entity will reduce its
future taxable profit by an amount of 100 and, consequently, reduce its future tax payments by 25 (100
at 25%).

The difference between the carrying amount of 100 and the tax base of nil is a deductible temporary
difference of 100. Therefore, the entity recognises a deferred tax asset of 25 (100 at 25%), provided that
it is probable that the entity will earn sufficient taxable profit in future periods to benefit from a reduction
in tax payments.

The following are examples of deductible temporary differences that result in deferred tax assets:
• (a) retirement benefit costs may be deducted in determining accounting profit as service is
provided by the employee, but deducted in determining taxable profit either when contributions
are paid to a fund by the entity or when retirement benefits are paid by the entity. A temporary
difference exists between the carrying amount of the liability and its tax base; the tax base of the
liability is usually nil. Such a deductible temporary difference results in a deferred tax asset as
economic benefits will flow to the entity in the form of a deduction from taxable profits when
contributions or retirement benefits are paid;
• (b) research costs are recognised as an expense in determining accounting profit in the period in
which they are incurred but may not be permitted as a deduction in determining taxable profit
(tax loss) until a later period. The difference between the tax base of the research costs, being the
amount the taxation authorities will permit as a deduction in future periods, and the carrying
amount of nil is a deductible temporary difference that results in a deferred tax asset;
• (c) with limited exceptions, an entity recognises the identifiable assets acquired and liabilities
assumed in a business combination at their fair values at the acquisition date. When a liability
assumed is recognised at the acquisition date but the related costs are not deducted in
determining taxable profits until a later period, a deductible temporary difference arises which
results in a deferred tax asset. A deferred tax asset also arises when the fair value of an identifiable
asset acquired is less than its tax base. In both cases, the resulting deferred tax asset affects
goodwill; and

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 • (d) certain assets may be carried at fair value, or may be revalued, without an equivalent
adjustment being made for tax purposes. A deductible temporary difference arises if the tax base
of the asset exceeds its carrying amount.

Example:
Identification of a deductible temporary difference at the end of Year 2:

Entity A purchases for CU1,000, at the beginning of Year 1, a debt instrument with a nominal value of
CU1,000 payable on maturity in 5 years with an interest rate of 2% payable at the end of each year. The
effective interest rate is 2%. The debt instrument is measured at fair value.

At the end of Year 2, the fair value of the debt instrument has decreased to CU918 as a result of an increase
in market interest rates to 5%. It is probable that Entity A will collect all the contractual cash flows if it
continues to hold the debt instrument.

Any gains (losses) on the debt instrument are taxable (deductible) only when realised. The gains (losses)
arising on the sale or maturity of the debt instrument are calculated for tax purposes as the difference
between the amount collected and the original cost of the debt instrument.

Example
Accordingly, the tax base of the debt instrument is its original cost.

The difference between the carrying amount of the debt instrument in Entity A’s statement of financial
position of CU918 and its tax base of CU1,000 gives rise to a deductible temporary difference of CU82 at
the end of Year 2, irrespective of whether Entity A expects to recover the carrying amount of the debt
instrument by sale or by use, ie by holding it and collecting contractual cash flows, or a combination of
both.

This is because deductible temporary differences are differences between the carrying amount of an asset
or liability in the statement of financial position and its tax base that will result in amounts that are
deductible in determining taxable profit (tax loss) of future periods, when the carrying amount of the asset
or liability is recovered or settled. Entity A obtains a deduction equivalent to the tax base of the asset of
CU1,000 in determining taxable profit (tax loss) either on sale or on maturity.

The reversal of deductible temporary differences results in deductions in determining taxable profits of
future periods. However, economic benefits in the form of reductions in tax payments will flow to the
entity only if it earns sufficient taxable profits against which the deductions can be offset. Therefore, an
entity recognises deferred tax assets only when it is probable that taxable profits will be available against
which the deductible temporary differences can be utilised.

IAS 12.34-36 Unused tax credits

A deferred tax asset shall be recognised for the carryforward of unused tax losses and unused tax credits
to the extent that it is probable that future taxable profit will be available against which the unused tax
losses and unused tax credits can be utilised.

An entity considers the following criteria in assessing the probability that taxable profit will be available
against which the unused tax losses or unused tax credits can be utilized:

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 • (a) whether the entity has sufficient taxable temporary differences relating to the same taxation
authority and the same taxable entity, which will result in taxable amounts against which the
unused tax losses or unused tax credits can be utilised before they expire;
• (b) whether it is probable that the entity will have taxable profits before the unused tax losses or
unused tax credits expire;
• (c) whether the unused tax losses result from identifiable causes which are unlikely to recur; and
• (d) whether tax planning opportunities are available to the entity that will create taxable profit in
the period in which the unused tax losses or unused tax credits can be utilised.

To the extent that it is not probable that taxable profit will be available against which the unused tax
losses or unused tax credits can be utilised, the deferred tax asset is not recognised.

IAS 12.37 Reassessment of unrecognized DTA

At the end of each reporting period, an entity reassesses unrecognized deferred tax assets. The entity
recognises a previously unrecognised deferred tax asset to the extent that it has become probable that
future taxable profit will allow the deferred tax asset to be recovered.

IAS 12.46-49 Measurement

Current tax liabilities (assets) for the current and prior periods shall be measured at the amount expected
to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.

Current and deferred tax assets and liabilities are usually measured using the tax rates (and tax laws) that
have been enacted. However, in some jurisdictions, announcements of tax rates (and tax laws) by the
government have the substantive effect of actual enactment, which may follow the announcement by a
period of several months. In these circumstances, tax assets and liabilities are measured using the
announced tax rate (and tax laws).

When different tax rates apply to different levels of taxable income, deferred tax assets and liabilities are
measured using the average rates that are expected to apply to the taxable profit (tax loss) of the periods
in which the temporary differences are expected to reverse.

The measurement of deferred tax liabilities and deferred tax assets shall reflect the tax consequences that
would follow from the manner in which the entity expects, at the end of the reporting period, to recover
or settle the carrying amount of its assets and liabilities.

IAS 12.57-60 Recognition of current and deferred tax

Current and deferred tax shall be recognised as income or an expense and included in profit or loss for
the period, except to the extent that the tax arises from:
• (a) a transaction or event which is recognised, in the same or a different period, outside profit or
loss, either in other comprehensive income or directly in equity; or

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 • (b) a business combination (other than the acquisition by an investment entity, as defined in IFRS
10 Consolidated Financial Statements, of a subsidiary that is required to be measured at fair value
through profit or loss).

Most deferred tax liabilities and deferred tax assets arise where income or expense is included in
accounting profit in one period, but is included in taxable profit (tax loss) in a different period. The
resulting deferred tax is recognised in profit or loss.

Examples are when:

• (a) interest, royalty or dividend revenue is received in arrears and is included in accounting profit
in accordance with IFRS 15 Revenue from Contracts with Customers, IAS 39 Financial Instruments:
Recognition and Measurement or IFRS 9 Financial Instruments, as relevant, but is included in
taxable profit (tax loss) on a cash basis; and
• (b) costs of intangible assets have been capitalised in accordance with IAS 38 and are being
amortised in profit or loss, but were deducted for tax purposes when they were incurred.

The carrying amount of deferred tax assets and liabilities may change even though there is no change in
the amount of the related temporary differences. This can result, for example, from:
• (a) a change in tax rates or tax laws;
• (b) a reassessment of the recoverability of deferred tax assets; or
• (c) a change in the expected manner of recovery of an asset.

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