Please explain how accountants are expected to address uncertainty in whether deferred tax assets can be used in the future affect income tax expense.
These are the following ways by which the accountants can determine whether the deferred tax assets can be used in the furure :
A deferred tax asset arising because of investments in subsidiary, branches and associates and intersti in joint agreement are recognised to the extent it is probable that the deferred rmtax can be reversed in future and the taxable profit can be utilised.
Deferred tax assets recognised for unused tax loss carry forwards or unused tax credits are only considered if there is a probability that there will be sufficient future taxable profit against which the loss or unused credits can be utilised.
Also the deferred tax assets carrying amount is revalued at the end of each reporting period, any amount reduced as such will be reversed to the extent it is probable that there exists sufficient conditions.
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