Document ID: chunk:federal_register_of_legislation:F2023C00930:reg:5:p45
Version: federal_register_of_legislation:F2023C00930
Segment Type: reg
Provision Reference: reg 5 (pt 45/61)
Character Range: 150643–154460

tax rate from 35% to 30%.

In respect of each type of temporary difference, and in respect of each type of unused tax losses and unused tax credits:
(i) the amount of the deferred tax assets and liabilities recognised in the statement of financial position for each period presented;
(ii) the amount of the deferred tax income or expense recognised in profit or loss for each period presented, if this is not apparent from the changes in the amounts recognised in the statement of financial position (paragraph 81(g)).
                                                                                       X5        X6

Accelerated depreciation for tax purposes                                              9,720     10,322
Liabilities for healthcare benefits that are deducted for tax purposes only when paid  (800)     (1,050)
Product development costs deducted from taxable profit in earlier years                100       –
Revaluation, net of related depreciation                                               –         10,573
Deferred tax liability                                                                 9,020     19,845

(note: the amount of the deferred tax income or expense recognised in profit or loss for the current year is apparent from the changes in the amounts recognised in the statement of financial position)

Example 3 – Business combinations
On 1 January X5 entity A acquired 100 per cent of the shares of entity B at a cost of 600. At the acquisition date, the tax base in A's tax jurisdiction of A's investment in B is 600. Reductions in the carrying amount of goodwill are not deductible for tax purposes, and the cost of the goodwill would also not be deductible if B were to dispose of its underlying business. The tax rate in A's tax jurisdiction is 30 per cent and the tax rate in B's tax jurisdiction is 40 per cent.
The fair value of the identifiable assets acquired and liabilities assumed (excluding deferred tax assets and liabilities) by A is set out in the following table, together with their tax bases in B's tax jurisdiction and the resulting temporary differences.
                                                                              Amount recognised at acquisition  Tax base  Temporary differences

Property, plant and equipment                                                                                   270                              155       115
Accounts receivable                                                                                             210                              210       –
Inventory                                                                                                       174                              124       50
Retirement benefit obligations                                                                                  (30)                             –         (30)
Accounts payable                                                                                                (120)                            (120)     –
Identifiable assets acquired and liabilities assumed, excluding deferred tax                                    504                              369       135

The deferred tax asset arising from the retirement benefit obligations is offset against the deferred tax liabilities arising from the property, plant and equipment and inventory (see paragraph 74 of the Standard).
No deduction is available in B's tax jurisdiction for the cost of the goodwill. Therefore, the tax base of the goodwill in B's jurisdiction is nil. However, in accordance with paragraph 15(a) of the Standard, A recognises no deferred tax liability for the taxable temporary difference associated with the goodwill in B's tax jurisdiction.
The carrying amount, in A's consolidated financial