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.
A two step approach under which a valuation allowance is recognised is
not adopted, rather a deferred tax asset is recognised directly for the
amount of recoverable deferred tax
after considering the following items:
► sufficiency of taxable income
based on earning ability;
► existence of tax planning;
► sufficiency of taxable temporary
differences
Certain guidance is provided for
judging the recoverability of deferred tax assets (however, the categories of
the assets or numerical criteria are not stipulated as in JGAAP).
When considering the recoverability
of deferred tax assets arising from the
elimination of unrealised profits on
consolidation, a determination is
made based on the general principles above (there is no exceptional rule as in JGAAP).