Financial Services Ireland

Banking & Capital Markets

ESMA expectations: recognition of deferred tax assets

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I would like to draw your attention to this publication where ESMA sets out expectations regarding the recognition of deferred tax assets arising from the carry-forward of unused tax losses. It includes considerations on two areas of attention:

  • Assessing the probability that future taxable profits will be available
  • Assessing whether convincing evidence supports the expectation of future taxable profits

ESMA considers it relevant that issuers, auditors and audit committees take into consideration this public statement when preparing financial statements and, in particular, when assessing whether DTAs fulfil the recognition criteria set out in paragraphs 34 to 36 of IAS 12. ESMA, together with the national competent authorities, will continue to pay particular attention to this issue when performing examinations of financial statements.

Click below to read the full publication. If you would like to discuss further, please do reach out.

Martina Keane

EY EMEIA Financial Services Chief Operating Officer
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