BC37 The IFRS Interpretations Committee (the 'Interpretations Committee') was asked to provide guidance on how an entity determines, in accordance with IAS 12, whether to recognise a deferred tax asset when:
(a) the entity has a debt instrument that is classified as an available-for-sale financial asset in accordance with IAS 39 Financial Instruments: Recognition and Measurement. [IFRS 9 Financial Instruments replaced IAS 39. IFRS 9 applies to all items that were previously within the scope of IAS 39. Under IFRS 9, the same question arises for debt instruments measured at fair value.] Changes in the market interest rate result in a decrease in the fair value of the debt instrument to below its cost (ie it has an 'unrealised loss');
(b) it is probable that the issuer of the debt instrument will make all the contractual payments;
(c) the tax base of the debt instrument is cost;
(d) tax law does not allow a loss to be deducted on a debt instrument until the loss is realised for tax purpos
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