Answered Questions

Date Submitted	07-Jul-10
Category	Financial Accounting & Reporting
Heading	DTA & TTD
Question	why the standard states:" DTA should be recognised for unused tax losses to the extent that is it probable that future taxable profit will be available against which the unused tax losses can be used" so how would we know about the future profit if we are only preparing the current year fiinancial statement?
Answer	You would need to assess why the tax loss was incurred and whether the causes have been overcome so that it is likley that future taxable income will be earned. You would also look at orders/contracts for future sales and budgets, etc.