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Tulip Ltd incurred an accounting loss of $7560 for the year ended 30 June 2013. The current tax calculation determined that the company had incurred a tax loss of $12 500. Taxation legislation allows such losses to be carried forward and offset against future taxable profits. The company had the following temporary differences:

At 30 June 2012, Tulip Ltd had recognised a deferred tax liability of $6750 and a deferred tax asset of $5250 with respect to temporary differences existing at that date. No adjustment has yet been made for temporary differences existing at 30 June 2013.

Required

1. Discuss the factors that Tulip Ltd should consider in determining the amount (if any) to be recognised for deferred tax assets at 30 June 2013.

2. Calculate the amount (if any) to be recognised for deferred tax assets at 30 June 2013. Justify your answer.

how about deferred tax liabilities

thank you

Exercise 6.10 RECOGNITION OF DEFERRED TAX ASSETS Tulip Ltd incurred an accounting loss of $7560 for the year ended 30 June 2013. The current tax calculation determined that the company had incurred a tax loss of $12500. Taxation legislation allows such losses to be carried forward and offset against future taxable profits. The company had the following temporary differences: Expected period of reversal 30 June 2013 30 June 2012 Deductible temporary differences: Accounts receivable Plant and equipment Taxable temporary differences: Interest receivable Prepaid insurance $12 000 5 000 $10000 2014 2014/2015 equally 7 500 1 500 10000 2 500 20000 2014 2014 At 30 June 2012, Tulip Ltd had recognised a deferred tax liability of $6750 and a deferred tax asset of 5250 with respect to temporary differences existing at that date. No adjustment has yet been made for temporary differences existing at 30 June 2013 Required 1. Discuss the factors that Tulip Ltd should consider in determining the amount (if any) to be recognised for deferred tax assets at 30 June 2013 206 PART 2 Elements

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