Question

Under IFRS: (a) “probable” is defined as a level of likelihood of at least slightly more than 60%. (b) a company should reduce a deferred tax asset when it is likely that some or all of it will not be realized by using a valuation allowance. (c) a company considers only positive evidence when determining whether to recognize a deferred tax asset. (d) deferred tax assets must be evaluated at the end of each accounting period.

Short answer

The accounting period is the duration in which the organization operates in a year. As per the GAAP,the accounting period for each organization startsfrom 1st April and lasts till 31st march.

Step-by-step solution

Option (d) deferred tax assets must be evaluated at the end of each accounting period is the correct answer.

Option d is the correct answer.

Reason

According to the IFRS, every organization should recognize the value of deferred tax assets at the end of each accounting period. It helps the organization in estimating the amount of total income tax payable. It also helps the business determine that if any extra income tax is paid, they will be entitled to a refund.