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Consideration of future tax cash flows (paras. BCZ81-BCZ84)

BCZ81 Future income tax cash flows may affect recoverable amount. It is convenient to analyse future tax cash flows into two components:

(a) the future tax cash flows that would result from any difference between the tax base of an asset (the amount attributed to it for tax purposes) and its carrying amount, after recognition of any impairment loss. Such differences are described in IAS 12 Income Taxes as ‘temporary differences’.

(b) the future tax cash flows that would result if the tax base of the asset were equal to its recoverable amount.

BCZ82 For most assets, an enterprise recognises the tax consequences of temporary differences as a deferred tax liability or deferred tax asset in accordance with IAS 12. Therefore, to avoid double‑counting, the future tax consequences of those temporary differences - the first component referred to in paragraph BCZ81 - are not considered in determining recoverable amount (see further discussion in paragraphs BCZ86-BCZ89).

BCZ83 The tax base

Comparing proposed amendment...