Green Wine Ltd (GWL) is a reporting entity, that is required to prepare General Purpose Financial… 1 answer below »

Green Wine Ltd (GWL) is a reporting entity, that is required to prepare General Purpose Financial… 1 answer below »

Green Wine Ltd (GWL) is a reporting entity, that is required to prepare General Purpose Financial Statements (GPFS), engaged in wine production in large scale. Green wine ltd is a profitable company and had been paying company tax. The company has recorded a $12 million accounting loss in the current period as a result of bush fire. The management of Green Wine Ltd are debating whether it can raise a deferred tax asset in relation to this loss in the financial statements for the current period. Required Prepare a report to managing director of GWL discussing whether the tax loss in the current year be recognised as a deferred tax asset in accordance with AASB 112 accounting for company income taxes, incorporating the followings (1 to 6). You are required to review one of the ASX listed companies’ annual report’s financial statements and notes to provide examples as to how they recognise deferred tax assets, when writing this report. In your report: 1. Examine the tax-effect accounting in accordance with AASB 112 as it applies to financial reporting. 2. Discuss how and when a deferred tax asset (DTA) or deferred tax liability (DTL) must be recognised. Discuss any differences between the criteria for DTA and DTL. 3. What is tax loss and how is it accounted for? 4. Evaluate the factors that should be considered in determining whether deferred tax assets relating to tax losses are to be recognised. 5. Analyse and report how the selected/allocated ASX listed company recognised and disclosed DTA, DTL and Tax losses if any. 6. Advise managing director how income tax losses can provide future tax benefits.

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