Concern about Deffered tax asset.

Question

IAS 12: Income tax state that:
Sufficient taxable profits can arise from: They can arise from existing taxable temporary differences. In principle, these differences should reverse in the same accounting period as the reversal of the deductible temporary difference or in the period in which a tax loss is expected to be used.

What do above sentence mean? Why reversal of taxable tamporary difference can be a factor to prove sufficient taxable profits in the future?.

These information stated in [IAS 12.37] and [IAS 12.34]

Comments

I just cant find this clause in IAS 12. From which standard are you excerpting this sentence?

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This is stated in IAS 12: [IAS 12.44] and [IAS 12.37]. Thank u very much.

Answer 1

Both paragraphs you mention specify rules on recognizing deferred tax assets as:
IAS 12.37 Reassessment of unrecognised deferred tax assets
IAS 12.44  Recognition of DTA on investments in subsidiaries, branches and associates, and interests in joint arrangements.
I don't see the text you mention in those paras either. By the way reversal of taxable temporary difference can NOT be a factor to prove sufficient taxable profits in the future as I understand.

Comments

Thank u very much.