Document ID: chunk:federal_register_of_legislation:F2023C00930:reg:5:p37
Version: federal_register_of_legislation:F2023C00930
Segment Type: reg
Provision Reference: reg 5 (pt 37/61)
Character Range: 119141–122091

liability.)
9 The liability component of a compound financial instrument (for example a convertible bond) is measured at a discount to the amount repayable on maturity (see AASB 132 Financial Instruments: Presentation). The discount is not deductible in determining taxable profit (tax loss).

Fair value adjustments and revaluations
10 Financial assets or investment property are carried at fair value which exceeds cost but no equivalent adjustment is made for tax purposes.
11 An entity revalues property, plant and equipment (under the revaluation model treatment in AASB 116 Property, Plant and Equipment) but no equivalent adjustment is made for tax purposes. (note: paragraph 61A of the Standard requires the related deferred tax to be recognised in other comprehensive income.)

Business combinations and consolidation
12 The carrying amount of an asset is increased to fair value in a business combination and no equivalent adjustment is made for tax purposes. (Note that on initial recognition, the resulting deferred tax liability increases goodwill or decreases the amount of any bargain purchase gain recognised. See paragraph 66 of the Standard.)
13 Reductions in the carrying amount of goodwill are not deductible in determining taxable profit and the cost of the goodwill would not be deductible on disposal of the business. (Note that paragraph 15(a) of the Standard prohibits recognition of the resulting deferred tax liability.)
14 Unrealised losses resulting from intragroup transactions are eliminated by inclusion in the carrying amount of inventory or property, plant and equipment.
15 Retained earnings of subsidiaries, branches, associates and joint ventures are included in consolidated retained earnings, but income taxes will be payable if the profits are distributed to the reporting parent. (note: paragraph 39 of the Standard prohibits recognition of the resulting deferred tax liability if the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.)
16 Investments in foreign subsidiaries, branches or associates or interests in foreign joint ventures are affected by changes in foreign exchange rates. (notes: (1) there may be either a taxable temporary difference or a deductible temporary difference; and (2) paragraph 39 of the Standard prohibits recognition of the resulting deferred tax liability if the parent, investor or venturer is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.)
17 The non-monetary assets and liabilities of an entity are measured in its functional currency but the taxable profit or tax loss is determined in a different currency. (notes: (1) there may be either a taxable temporary difference or a deductible temporary difference;